Factors to consider before buying an established business

[Augusta]

An owner of an established business can want to sell off a business for various reasons ranging from relocation to change of business. It might seems a good idea to you to inherit the business via buying but you need to take into consideration some factors abd be sure of it's foundation before parting with your money.

The below pointe must be given a thought and be sure before proceeding with payment


1. The company's books: You need to check the books to know it's assets and liabilities. Make sure that the assets exceed it's liabilities

2. Check the Company's reputation in the community: Find out what they community are saying about the company. Be sure that the good supersedes the negatives.

3. Check for it's Potential for growth: Find out about its growth level in the next 3-4 years

4. Find out the reason for seller leaving: If it doesn't make logical sense to you don't buy the business.

What's your thoughts?

 

[King bell]

Here are some of the factors I believe one should consider before buying into a business that is already established.

1. Location Considerations: As with any property, location is always important. So be sure to investigate the area where your interest lies and make sure it's in a prime location for your business. If you are purchasing a business that operates online, there may be infrastructure needed to have the right type of speed for effective web traffic that must be present in order to capitalize on this market opportunity.
2. Financing: Before even thinking about purchasing an existing business, you need to investigate whether or not the financing needed is available to you. There are several financing options available for this type of purchase. The down payment can be borrowed or financed through a bank or credit union. You may also be able to buy using seller financing which will include terms like low interest rates, long terms and sometimes no down payment at all.
3. Sales and Profits: One of the key components to being successful in any business is understanding the sales number and how they were generated.

 

[Augusta]

Yes, the second point is also important you need to be such that the money needed to be paid for the business is available and it is worth it as well. it might not even be easy to ascertain that you are making the right financial decisions that is why it is good to seek an expert advice, just seeing a business to be sold and buying it at the surface might spell doom for the buyer

It is also good to check the income and expenses of the business. This is a basic wsy to know how the business was performing before now. If the income rate is good by you and you know you can increase the percentage rate as you take over the business then you can go ahead to buy the business. But most importantly look at the liabilities of the business, be sure that you can easily pay off the pending expenses too.