Buying an existing business is less risky than starting a business of your own from scratch. When you purchase an existing business, you can hit the ground running and take over an operation or franchise that has already been established. Buying an existing business has many benefits since you have an already established customer base, business reputation, and the business has already been generating cash flow and profits. There are several things that must be considered before buying an existing business.
Once you have found the right and suitable type of business that you want to buy and invest in, it is important to verify the state of the business before you make an offer for purchase. This involves investigating all the advantages and disadvantages of buying an existing business.
There are several advantages to buying an existing business as opposed to starting your own business from scratch:
Franchises also have their own advantages and disadvantages. Buying a business franchise is like starting your own business since it has no existing customer base and most of the time you have to build the business to replicate the franchise brand that you purchased. However, unlike starting a business on your own when you purchase a franchise, you have a parent company instructing you how to control the business and you would have to share some profit to the franchise company. Here are some advantages and disadvantages of buying into a franchise:
If you've already made the decision to purchase an existing business, you may still have some questions to decide whether a business is the right choice for you. Here are some recommendations to help you start on your track to profits and success.
Negotiate the best deal possible: Negotiate as much as you can about all aspects of the business and see if you can end up with the best deal possible and if any extras the seller might throw in the deal.
Make it legal. For your own protection, ensure that everything that you negotiate and determine during the purchase is put in writing or a business contract. It is also important to get legal advice from an independent business attorney
Selling a business is a tough task and there are many things you have to do to sell your business properly. Every business owner must have a successful business plan that will give him or her with the most protection as possible. Here is a checklist on what to do when selling your business:
The timing of selling your business is very important since there are many procedures and duties that you must take care of before actually selling or winding the business down. Prepare for the sale as early as possible. Usually a good time to sell a business is a year or two years ahead of time. The preparation will help you improve your financial record of the business; create a solid business structure, and customer base to make the business more profitable. These business improvements will make the business have a better record for sale and will ease the transition for the buyer to keep the business running smoothly. A business sale may take six months to two years according to the U.S Small Business Administration.
Once that you have decided you want to sell your business, there are many things that you need to prepare for a potential buyer to be able to look at. When a buyer likes the business, the records of the business have to be prepared adequately and ready to be shown at request. Delay in producing these records may cause the buyer to make an offer on a similar business somewhere else. Be sure to have the following on hand before you put you business on the market:
Selling a business is major assignment that can involve many different steps and legal issues. Some
legal issues that can exist during a business sale can include:
Buying and selling a business involves many negotiations and contracts. A business attorney can assist you in the entire business purchaser or sell process and also the negotiation process to help you get what you want for your future business. An attorney can also help you sift through financial documents to determine what is relevant to the sales transaction. A lawyer can also arrange the real estate sales process, should you ultimately wish to buy or sell the business property.
Last Modified: 07-03-2018 09:30 PM PDTLaw Library Disclaimer
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