Buyer Learning Center
How To Buy A Business?
Buying a business can be a life changing event for yourself and your family. It should be taken seriously as acquiring a business requires a lot of work and usually a significant change in lifestyle. It is best to be fully prepared for both of these things to take place.
- Do you have the expertise on your products or service?
- Does your industry have a bright future or is it a fading industry?
- Do you have the administrative ability to run this business in addition to your other duties?
- If you do not have knowledge to run the business without accounting and attorney’s to assist, do you have the cash flow to pay them?
- Can you manage your family life and obligations while owning this business? If you are planning on working 24/7, you are planning to fail.
- Do you have knowledgeable and experienced staff to help grow and manage the business?
- What licenses or training is involved for both yourself and your employees?
- Is the business that you are considering have lows and highs based on seasons? If so, how do you get thru the lows?
- Does the business have the correct technology in place to be successful and grow?
- Do you have a plan for growth? Businesses that do not grow….Die!
Advantages Of Buying An Existing Business Vs Starting A New Business
Step 1: Valuing a business
Advantages Of Buying An Existing Business Vs Starting A New Business
Step 2: Buying a business that you understand
Advantages Of Buying An Existing Business Vs Starting A New Business
Step 3: Understand the cash flow
Understand the cash flow of the business you are considering. If the business that you are considering is a restaurant or coffee shop, it is fairly easy to understand the cash flow. But many businesses offer sales terms that create an accounts receivable ledger. If your vendors offer sales terms, then you will also manage an accounts payable ledger. Highly inventoried businesses require good inventory control and an accurate inventory management system. If you have a high number of employees, a regular payroll needs to be considered. Before buying, you should think thru all of the factors the effect cash flow. “He/she who runs out of cash…..looses”
Advantages Of Buying An Existing Business Vs Starting A New Business
Step 4: Be positive and ready to win
Be positive and ready to win. When you own a business, it is crucial that you can enjoy the experience and have fun. If you go to work each day and feel as if you are grinding away, eventually you will burn out. Your employees can sense a negative attitude and will react in the same way. If you always put off the air of positivity, the success of the business will be made easier. Is the business you are considering allow you to maintain a positive fun attitude?
Advantages Of Buying An Existing Business Vs Starting A New Business
Step 5: Setting goals
Setting goals. Is this the type of business that allow you to set goals for growth? If so, how will I be able to pay for this growth or will it grow organically? If you have trouble seeing how to grow and meet goals, probably should not buy the business.
