Buying an existing business is an exciting venture. It’s essential to start with something that you are passionate about, but you also need to make sure you know how much work is involved and that you have the right skills to push it to a healthier future.
If you are looking for a new investment and are ready for one of the most rewarding challenges of your professional life, then take a look at our quick guide to buying a business.
Start with the Basics
The very first step is to work out exactly what business you want to buy. It isn’t just about passions, you may have dreamed of owning a successful seafood restaurant, but if you have no experience or skills in catering, then you may soon realise the dream was better than the reality.
Choose something that appeals to your interests, but you have knowledge of. It helps if you have worked in the industry or sector, so you have a deep understanding of the inner workings. The most successful business owners have often started at the bottom and worked their way to the top; they know every aspect of the company they run.
Set Your Budget
Unlike buying a new house, your budget shouldn’t focus purely on the purchase cost of the business. You will need to have enough money to make any changes, hire more staff, deal with a potential loss in turnover if you are making drastic changes and many more factors.
Speaking to an independent financial advisor can help you find a realistic budget that will cover you through to the end of your first year of business.
You also need to decide how you will fund it. Financing is a good option, and companies like BSF can be particularly useful if you are purchasing in a niche market.
Due Diligence Is King
Once you have found the business you want to buy, you need to do a lot more research. It would be best to have an accountant and a lawyer to start working on due diligence. You will most likely have had to sign a non-disclosure agreement, and you will need legal advice to ensure you are protected. There is a lot you can do yourself too. Check the internet, forums and social media and read what the clients and customers have to say.
Check the Paperwork Twice
Once you have worked your way through all the steps and you are ready to close the sale, you need to make sure every bit of paperwork is included. The obvious things such as Bill of Sale and any lease on commercial properties will need to be checked by your legal team, but you also need to ensure you have all vehicle documents, patents and trademarks and franchise agreements. It can be easy to miss things out or overlook them, so always check twice before you sign on the dotted line.
Finally, get ready for the hard work to begin!