A Basic Guide to Buying a Business

Quick links

Hopefully you can combine all three. Not everyone appoints a broker, but there are, despite the costs involved, persuasive reasons for doing so. Fancy doing a part-time job in addition to your role as business proprietor? For the buyer, a professional adviser acts as an invaluable buffer in what is an emotive process.

They will also help you with paperwork and negotiations.

Your essential guide to buying a small business

The more fastidious your preparations, the better the chance of a quick sale at a satisfactory price. From tidying up books and records to refurbishing premises, even minor details could make the difference. Businesses are most often valued by a multiple of profit.

A rule-of-thumb valuation often includes elements of several methods. Few sellers undervalue their business and many overvalue them, either through subconscious bias or a desire to get a strong return on their efforts. Ask the seller which method s they used to arrive at the valuation and double check their calculations with reference to relevant financial records.

Weekly Newsletter

And identify anything else, not accounted for in the valuation, that could make the business more or less valuable, such as disruptive consumer trends or technologies on the horizon or ways to add value like diversification. The main reason most people buy a small business rather than starting one is for the established infrastructure and ongoing cash flow.

People buy franchises for similar reasons — they usually come with supplier agreements and a proven system of what works and what doesn't. That said, buying an existing business has its own challenges. You'll need to do your research and conduct detailed due diligence. Plus, there's every chance you'll need to secure a business loan in order to pay the required lump sum for the business. Once you've found a suitable business, you'll need to verify the state of the business before making an offer.

This includes ensuring that sales are as good as the owner says and that employees will be happy with a new owner. You should also check that customers will remain loyal once you take over. Make sure you investigate all aspects thoroughly. Are the business systems sound and documented, and is the cash flow sustainable? A business owner will want to sell their business for as much money as possible and you'll want to pay as little as possible.

Your aim is to make the seller want to sell the business to you — on your terms and at your price. Formally register your interest in buying the business. The owner will usually have instructed a business adviser, such as a business broker, lawyer or accountant, to sell the business. Approach the advisers, rather than the owner, to register your interest. Your integrity and your future plans for the business are usually extremely important to the seller.

If you can uncover the seller's motivations, you'll gain an advantage in the negotiation process. If the owner has to sell within a certain time period then you may be able to negotiate a lower price. Before you make any offer, complete a preliminary due diligence to ensure the business has no major problems. Always ask yourself this question — "If the business is as wonderful as they make out, why they are selling?

Sellers often gloss over the weak areas of the business or create short-term gains to give a favourable impression of the business. For example, lowering stock levels to artificially inflate profit before stock needs to be re-ordered can make a business seem more profitable.

Ensure you investigate thoroughly before you show your interest in buying the business. Tap into the knowledge of those in the know to assess the future business viability of your acquisition:. If the business is not making a profit, try to uncover why. Once you've indicated that you're interested in buying the business, you can usually get access to more detailed information.

You'll likely need to sign a Heads of Agreement or confidentiality statement. Does the business have an efficient accounting system in place and does the owner monitor key performance indicators regularly? Check the major balance sheet items:.

• Requisition For: A Thief ~ Book 1 ~: A Diamond for the Taking.
• Mi Fukushima (Spanish Edition).
• New Springs.

Working out how to value a business is key before you make an initial offer. Always get professional advice, especially if there are any tax implications. Make your own sales and profit projections rather than relying on supplied figures. If you have ideas on how to increase profits, this is your good fortune.

Don't inflate your offer price because of opportunities you've identified.

Comprehensive guide to buying a business in Florida

If you can't identify where savings can be made and where there is scope to increase profits, then you shouldn't be buying the business. Though it sounds obvious, making a lower offer and increasing it if required is always a better strategy than going in high at the start. Ultimately, the business is only worth what someone will pay for it. The seller might have to lower their expectations.

Goodwill is an amount the seller might expect from you for the value of the business's intangible assets such as an established brand, loyal customers, high profit, quality staff, good location, long lease or supportive suppliers. Get advice from your accountant on the most favourable way to deal with goodwill. Try to negotiate it down if you can. For example, it may be more favourable to pay more for assets than to pay goodwill because assets can be depreciated over time.

Sellers usually prefer a lump sum for the business, and if that's the case you may need to look into securing business loans and finance. However, often the seller often has to leave some money in the business to help finance the deal. Try asking the seller if you can pay off the business over a period of time rather than in a lump sum. High quality, low price, or something in the middle can all be had, just be open and honest about your needs and your budget and the right partners should be able to accommodate you well.

1. Millionaire Interviews;
2. Lentrepreneuriat (Les essentiels de la gestion) (French Edition).
3. Lecture Notes on O-Minimal Structures and Real Analytic Geometry: 62 (Fields Institute Communications).
4. Durch Musik zur Sprache: Handbuch (German Edition).
5. Arrogance and Scheming in the Big Ten-Michigan States Quest for Membership and Michigans Powerful Opposition;
6. RTI & Differentiated Reading in the K-8 Classroom.

Square flaps, peel and stick, single window, double window, remittance, 10, 9, A6, A7, A2, bright white, natural white, catalogs, booklets, 24 lb. Four-color envelopes can be had inexpensively at lower quantities a few thousand or so where they can run on a digital press instead of a four-color offset press. Believe it or not, I often prefer a two- or three-color envelope over a four-color because the PMS colors can really pop. If you send out a lot of invoices hopefully you will!

All you need to know about these besides which size you should buy to fit what you're putting inside is the difference between a catalog and a booklet envelope.



• The Adventures of Super Towel.
• Advice for starting or buying a business | www.newyorkethnicfood.com.
• Step-by-step guide to buying a business | Wright Hassall.
• Math Games For Kids: Adding With Six - An Interactive Book.
• ​Buying a small business – your essential how-to guide - NAB.
• THE (NEARLY) COMPLETE GUIDE TO BUYING A BUSINESS & A FULL-TIME JOB - Entre Partner Law.
• Unternehmensstrategien zum Umgang mit den Folgen des demographischen Wandels: Im Zusammenhang mit Age Management (German Edition).

These are an option you should consider, but be sure you have a reason to order them before you do. For professional services, the most common option is a nice, heavy cotton or linen stock with a simple one- or two-color logo in the middle on the front cover. You can get a lot of legs out of a metallic ink, or if you want to spend a little more money and like the look, a gold or silver foil stamp process. Neither are necessary though. Sometimes a single note or message can last weeks in full view every minute of every day.

Four-color pads are great if you have a need but the same rules as discussed in the envelope section above apply here. As for paper, 50 lb. Anything heavier than that is nice but overkill. Talk to your local printer or check out CorporateNotepads. And there you have it, everything you need to at least get yourself started with your printing needs. Last updated on June 30, Business Cards Business cards are a basic staple for any business owner.

I always opt for the latter: