Most of you think that a business is something you start from scratch and build on to. While that may be true, it is not always the case. You can also run your own business by purchasing a pre-existing business and calling it your own!
You can make all the necessary changes and make it your own through your own finishing touches and adding a little bit of you to it. If you see a business that isn’t doing so well and you feel like you can do better with it, then you can always talk to the owners and ask if they are willing to sell it. That is still a great way to go by it!
Of course, you can’t just go up and buy any business that you like. There are several factors that you need to get into mind before making a financially heavy decision like that! This article is going to walk you through some of the factors that you need to take into consideration before purchasing a business.
Ask yourself these questions first:
What kind of business do I want?
If you are going to run a business, it is going to change your life. So how do you want it to? First, you need to keep in mind your budget and the size of the business. If you have lesser money, you’re going to be looking for a smaller business like a tiny café maybe? Also, you need to keep in mind your location and how far the business is from where you live. Can you easily go there every day? Is the location suitable for a business of that nature?
Also, knowing what industry you’d like to enter is very important as well. For example, a beautician cannot possibly think of buying a butcher’s shop or a bakery. So the niche and industry are important determining factors in this regard. Now if you’re choosing a business, you must keep your lifestyle in mind. Do you want a business that involves lots of travelling or would you prefer being stagnant? Your business will have a significant impact on your life, so make sure you answer all these questions before buying one.
Have I done my research?
Don’t just start browsing businesses up for sale! First look at businesses close to you. Has anyone in your circle had a successful business? Are there any businesses that you love buying from up for sale? Is the place that you’re working for up for sale? If you like a business, you can always just ask the owners.
After answering these questions, move towards your business contacts, and then approach the internet for your research. There are plenty of websites that offer platforms where people can buy and sell businesses. But be vary of scammers and bad deals. Always do your research before entering any kind of contract.
If you still are unsure after your research, you can always seek help from a business broker. At a commission, the broker will do the research part and help you find businesses to buy and make an informed decision
Have I looked into the business I selected?
Now even when you’ve done your research, picked a business and have a good deal waiting, you still can’t rush! Sometimes these deals are too good to be true.
The financials of a company are very important. So get a professional accountant to evaluate the books and ask the current owners any questions you may have regarding the business. Try clearing up any ambiguities that may arise and also make sure there aren’t any debts that were taken before you and remain unresolved.
Do I have the means to buy the business?
Buying a business in Australia can be expensive. Even if it’s a small one. So the next step is to get the financing in order. You can either get a loan from a bank at a certain interest rate, or ask for it from venture capitalists or angel investors. Through angel investors, you will be a partner to them and will purchase the business as a partner to share profits. Or you could go for seller financing where you pay the seller in chunks or installments to buy the business.
Have I Negotiated and made a suitable contract?
Before signing the agreement paper, make sure you have an attorney look at it first. Clear up any ambiguities and sign only when you are completely sure of the terms. Signed? Well congratulations on the purchase of your new business!