Buying a Business
For many people who are looking to go into business for themselves, buying an existing business is a more appealing option than starting a new one from the ground up. Buying an established business has several benefits. A lease has already been established, necessary supplies and equipment have been purchased, employees have been hired and, perhaps most importantly, there is already an established customer base. Still, there are several things that you need to keep in mind when buying an existing business.
Invest in What You Know
A common mistake many people make when buying a business is choosing to dive head first into an industry that they know nothing about. Buying a business in an industry you know nothing about means that you will have a lot to learn in a very short period of time. Also, you are more likely to overpay if you are not familiar with the industry.
Research, Research, Research
When you’ve found a business you’re interested in buying, start doing your homework. Investigate to find out as much as you possibly can about the business’s history. Examine financial records, employee files, contracts, lease agreements, etc. The more you can learn about the businesses finances and history, the better. Due diligence provides you with valuable information about how the company ticks, and it also ensures that you will not run into any surprises after making the purchase.
Know Exactly What You’re Getting
When you’re buying a business, you need to know exactly what you’re getting. Does the sale include things like equipment, inventory, recipes and formulas? You also need to know about any business debt you may be acquiring with your purchase. This information is crucial when it comes time to negotiate a price.
Get Legal Advice
Don’t buy a business on your own. Hire a business attorney to help you with negotiations and go over legal documents to make sure you are getting a fair deal. An attorney will also help you make sure that you take all the correct steps in taking over the business. If you’re in the market for a new business and need help with contracts, leases or negotiations, call me today.