How to Buy a Business
Buying an existing business can be overlooked by entrepreneurs as a decent choice. However, if you’ve got an established name, current customers and an immediate revenue stream then it can be good choice. The issue is finding a viable business can be troublesome and finalizing the sale may be an in-depth negotiation process. Below are 12 questions to consider when looking at a business that will help the buying process.
- Does operating this business match my skill set and interests?
- Do the operational requirements meet my lifestyle?
- How long has the business been operating?
- How long have the current owners had the business?
- What are the main reasons for selling?
- What is the past, present and current cash flow?
- How and who valued the business?
- What are the terms and length of any leases, supplier contracts?
- Is the current owner available to help with the transition?
- Has the current owner followed a business plan?
- What marketing strategies have been used?
- Is the business dependent on the current owner or highly specialized knowledge?
These questions offer good guidance and may seem elementary to answer initially. However, usually they lead to more questions and uncertainty. When dealing with cash flow and valuations you don’t want to misread anything. Even personal questions about matching the business to life goals can be tough to answer.
If you are not an experienced business buyer then consider seeking assistance. A professional broker can first make sure a business matches your goals and then take care of important details. This can save time, give confidence and reduce stress during the buying process.
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