10 things to know before you buy a business
Before you take the plunge and buy a business it pays to get your thinking right, because the quality of your choices will play a large part in determining your success...
Before you buy a business find out:
1. Are you business ready? Understand your skills, strengths and weaknesses, and have the necessary resources and support to buy a business.
2. Is the business is in an industry you have or can gain experience in, have a vision for and can add value to while living and supporting the lifestyle you want?
3. Is there a sound market now and tomorrow for the product or services this business provides?
4. Who are the competitors? Are they a threat, and how is this business positioned to operate in-light-of; imports, new technologies, regulations and currency fluctuations?
5. Who are the key customers? What do they represent, how do they feel about this business, and are they are friends or related to the current owner?
6. What are the relationships, terms, and contractual arrangements with suppliers and can these be readily transferred?
7. Why is the business for sale? How profitable is it, and has it been over the last three years, what are the trends? Your accountant will help recast the accounts to confirm this.
8. Are any leases, contracts, employment matters and/or intellectual property legally sound? Use your lawyer to assist here.
9. Is the price is fair and reasonable? That all plant and equipment required is in good order and listed, that the stock has been accounted for and valued appropriately, and that any goodwill is appropriate to the strength and earnings of the business.
10. What legal structure you will use to operate the business, how you will fund and service the borrowing of the business and how you will contribute to its success.
Owning a business can be very rewarding, apart from the potential to amass wealth, you get to decide when and how long you work, who you work with, and the manner in which you produce the product or service. However when buying a business, make sure its something that you really want to do, something you are passionate about, have a vision for and have the necessary skills to add value to. Before you buy a business, always do your homework, consult with professionals and ask these questions before you buy a business.
By Richard O'Brien - nzbizbuysell
Share this article:
- Finding the right business to buy
- Buying an existing business
- Choice chance and change
- What makes a successful small business owner
- 5 things that keep business owners up at night
- Why now is good for buying a business
- How to measure business success
- Business visas - buying a New Zealand business
- New Zealand business migration business visas
- Work from home in a home based business
- About buying a manufacturing business
- About buying a distribution business
- About buying a retail business
- About buying a service business
- Buying a cafe or restaurant
- Buying a hotel or motel
- Hotels for sale and buying one
- Small businesses for sale
- Owning a business
- Be your own boss
- Buying a shop or retail business
- Before buying a trucking business
- Mistakes to avoid when buying a business
- Retail business, but not as we know it
- 10 things to know before you buy a business
- Do I need an Accountant?
- Why buy a franchise business opportunity
- Finding the right franchise for sale opportunity
- Researching franchise opportunities