Buying an existing business is a good option because it saves the buyer from hard work establishing a new business and promoting it. Buying an operating business is always considered a way of less risk because it brings a lot of current customers with itself.
So if you are planning to buy a business because of its advantages, then this article is for you. In this article I will discuss some basic things each buyer should think about before making a final decision to buy or not.
1. Assess Your Skills – You should be completely aware of your skills. You should be ready to handle the responsibilities which come with a business. You should select the niche in which you are an expert and can handle really well. An operating business doesn’t give you the power to make big changes because it can effect current customers and its reputation in the market, hence you should be ready to adjust with the current lifestyle of the business.
2. Do Your Research – As a buyer, it’s important that you do a deep research related to the business in consideration. Try to find out the possible reasons why the business is for sale. Research the current financial situation of the seller and business’ reputation in the market . Also, if possible try to contact the existing business clients and take their feedback.
3. Think Of The Future – Most of the time, buyers make decisions by watching only the current revenue of the business. ALWAYS try to think about the future and try to know about the market trends. Try to determine the scope of the business in the future and don’t give much importance to previous numbers. You should make a decision according to the latest market trends and environment.
4. Negotiate A Deal – Once you have decided you are going to buy the business, make an offer. Factors like the length of time the business has been for sale, the seller’s financial condition and the current client base can help you in making a decision. Also, try to get advice from professional business brokers for an exact valuation of the business.
5. Transition Period – Transition period is the time interval in which the previous owner would familiarize you with the current customers and operations of the business. This transition period could be from a few weeks to several months depending upon the size of the business. Try to discuss the transition period with the seller before making any final decision about the deal.
6. Buy The Business – After you have finished all research about every aspect of the business ,cleared all your doubts about the business and negotiated a good deal, then you can buy the business.
About The Guest Author: Andrew R. Cagnetta is the president of Transworld Business Brokers, the leading business brokers providing professional services all over the world in buying or selling businesses. From business brokerage to mergers and acquisitions; they are the business sale specialists.