General advice for buying a business
Our website is offering to you a lot of businesses ideas, businesses for sale provided by the owners or brokers. Depending on your previous knowledge and experience, we invite you to choose the type of business that suits you the best.
General advices:
Appeal to the services of specialized counsellors: accountants, business brokers, financial analysts, advisors, lawyers who can help you better evaluate the business you want to purchase, from all points of view.
- Ask for information about the businesses you are interested in.
Many businesses offer little information in the presentation they offer; this information is just a starting point in your analysis. The intermediary financial situations, the monthly sheets of balance do not have final results and it is recommended to study the yearly balance and the audit report (if there is such a report).
Some businesses have temporary changes and you can only picture the whole image reporting the figures from similar periods.
Experienced business buyers visit the business they want to buy, do their own calculus (sales, costs, administration expenditure) and they try to determine the profit alone or the possible connections, or the expenditure cuts that can be obtained through a combination with an existent business. They also concentrate on aspects that can not be measured in money but which are also of great importance: the existence of a well prepared, experienced staff, a good marketing strategy, the image of the company, etc.
Be very discret - there is the possibility that the seller does not wish his employees to know that s/he is on the point of selling her/his own business.
Be meticulous and write down any information that you think is of big importance.
Check each and every service or product offered.
Check the information from the client's point of view.
Would you be able to run that business? What would and could you improve? What changes would you make? Do you foresee any opportunities? You buy the business as it is but you have the chance of a new beginning with you running that business. A lot of businesses sell due to some events that appear in the lives of the owners, due to the advanced age of the owners, due to the change of residence, due to the lack of heirs or of a person who could run the business in the future, etc. Other businesses sell due to the lack of assets needed in the company's development.
Many times a competitor or an investor is looked for from a resembling activity area who is willing to invest and through the synergy of the association beneficial effects can result: the increase of the production capacity, access on new markets, the increase of the market share.
Some companies present aspects that are difficult to be noticed without the help of an expert. Middle and big companies can use different methods to reduce the profit tax, the VAT, the duties and taxes to the state. A lot of such companies own under evaluated real estate in order not to pay huge taxes to the state or they have more leasing contracts.These aspects do not represent disadvantages or weak points of the businesses but they can have different implications. In order to have a clear image about a business in general it is recommended that you appeal to specialists.
Find out more details about how can you buy a business by studying the section:
Buy a Business.