What Goes Into Buying an Existing Business
Many aspiring entrepreneurs are keen on the idea of founding their own companies and striking it rich. They're enamored with the entire process – devising an idea, developing a product and marketing it, completing sales and gradually growing an enterprise.
Have you considered purchasing a business? Perhaps it's time you investigated this strategy.
All of that is well and good, but it's only one of many paths to business success. Here's another – have you considered purchasing a company that already exists?
At the moment, there are thousands of them on the market, available to the highest bidder. Perhaps it's time you investigated this strategy in greater depth.
Weighing all the relevant factors
If you decide to find a business for sale on the market today rather than found your own, that's great. There are plenty of options to choose from. But according to the Department of Industry, Innovation and Science, there are a few factors you'll need to think about first.
- How is the business structured? Is there a sole proprietorship, a group of partners or another arrangement altogether? Will you need to change this?
- How are the company's sales doing? Are there visible upward or downward trends over the years? Are they making enough money to cover expenses?
- What's the long-term plan? Are there any changes that need to be made in terms of marketing, sales or managing talent internally?
All of the above will contribute to the difficulty of managing your business in the future. Make sure you're ready.
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Carefully researching your options
It's also important to note that you can't learn everything you need to know simply by talking to whoever's currently in charge of a business. You have no assurance that the person selling a business is going to be forthcoming.
Look through all the financial records you can find.
That's why, according to the US Small Business Association, it's important to research your purchasing options via other means. Look for every piece of financial records you can find. Dig up profit and loss statements from previous years, tax returns and conditions of their leases and other contracts. If they've had financial mishaps over the years, such as cancelled checks, find out why. There's a lot to investigate before you commit your hard-earned money to a deal.
Explore the marketplace today
If you decide that you do indeed want to purchase a business, it's important to know the ground rules first. These vary significantly by state. The laws governing a business for sale in NSW might be very different from somewhere else. It's advisable to work with experts who can help guide you through the process.
At BSALE, we can provide that guidance. We have not only a directory of over 7,000 currently available businesses, but also a team of agents prepared to help you make the deal that's best for you. Talk to us today about how we can begin that process.
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Thinking of buying a business? Consider these things first!