Buying an existing business is an appealing concept because it allows one to bypass many of the initial steps and growing pains of starting a new business from scratch. However, buying an existing business comes with its own unique challenges and obstacles. Continue reading to learn more about this process and how you should navigate it.
The Path to Buying a Business
One of the most important steps you can take in buying an existing business involves research. Choose a type of business that has a model, services, or products you are familiar with. The better you understand the industry, the more likely you will be successful. Once you narrow down the type of business you are interested in buying, you can start searching for businesses that are up for sale. You can do this by searching through BizBuySell.com, classified newspaper ads, Craigslist ads, or by attending industry conferences where you can ask other business professionals. You may also consider working with a business broker. However, keep in mind that business brokers represent the seller.
There are many reasons why a business might be available for sale. Understanding what is no longer working for the business you are interested in buying is crucial. Some problems may be easy for you to solve while others may be irreparable. If something is fundamentally wrong with the business you are eyeing, go back to the drawing board and search for something else.
Here are some potential problems you should be wary of:
- Existing business debts
- Inventory problems, including low-quality products or high production costs
- Location issues
- Bad or outdated equipment
When zeroing in on your selection, you should also focus on a business that is aligned with your goals, budget, and resources. In addition to understanding the problems the business you are considering may have, you should also collect as much information as you can about the business. While conducting this step, you should consider working with an attorney to ensure you have all the information you need to make the best decisions.
Lastly, to determine an appropriate price for the business, you will need to evaluate its assets and earnings. Without an understanding of the business’s value, you cannot be certain if the price you are paying is fair.
Speak to a Knowledgeable Business Law Attorney Today!
If you are interested in buying an existing business, reach out to the mergers and acquisitions team at Duke Law Firm for the experienced legal advice and guidance you need to smoothly navigate this process. Our law firm is committed to providing cost-effective, top-notch legal services for every client we represent.
Reach out to our law office today at (210) 880-0652 or online to request a consultation.