A Blog of a Work from Home Breadwinner. Blogging anything under the sun since college days.

Buying A Business - What You Need To Know

Starting a business is hard. Perhaps it is made harder by the fact there is so much competition out there. More people are trying their hand at entrepreneurship these days. The internet certainly makes it possible. But it means that there are a large number of people clamoring to make their business viable in the same way. Why not buy a business that is already established? You’ll be walking into a company with a history of success and the goodwill of a customer base thrown in. Be wary though - make sure you’ve done your homework: 

Goodwill? 

Many businesses that come up for sale in the local area are up for grabs because the owner wants to retire. That means, for whatever reason, the family of that owner doesn't want the business. Why? That’s for you to find out. Potentially, the owner or their family are taking the customers to a new business for a fresh start without the hassle of the work! Make sure you genuinely have the customer base and a no competition clause in your contract. 


Legacy? 

If the business has been around for a while, you may have a lot of legacy documents to get through. This is the last thing you want to be spending time on when you’re trying to relaunch a business as your own. It might be a good idea to find document storage services in your area that can index the files for you. This will help you identify what you have, and give you the means to access it quickly and effectively if you need to. 

Current?

You might be interested in this business because it has potential to be updated and expanded online. Still, most businesses have an online presence like a website. It’s important you check the analytics and metrics across all online activities, so you can determine the effectiveness of campaigns. It might also give you some insightful data about potential growth areas for the online side of your business. 


Rates? 

When you buy a business, you usually adopt the premises. Make sure you’ve triple checked any finances or rental agreements associated with this. You don’t want to find out the lease is up shortly with no chance of negotiating a favorable renewal. Equally, you will need to know what rates you have to pay there. Taxes, insurances, utilities and other services need paying. But it is the subscriptions and fixed term contracts you need to be very wary of! Make sure you don’t inherit anything you don’t want. 

Stock? 

If your new business sells anything, make sure you know in advance how much stock you’re buying. Go through the sales sheets and accounts to determine the genuine value of this stock. Double check these items actually sell too! Check the inventory to see when they were purchased. It’s pointless buying stock you can’t sell. 

Buying a business instead of sowing the seeds of one is a big undertaking. For a start, it requires a cash investment. But the goodwill you’re buying might soon offer rewards.
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