Buying a business is a huge milestone, so it only makes sense to do it properly. Whether you’re looking to expand your existing operations or embark on a whole new entrepreneurial venture, it’s important to have a decent understanding of what to do and more importantly, what not to do! We’ve compiled a list of dos & don’ts for you to consider during this pivotal point in your life.
Do’s:
Have a (Flexible) Plan
Before buying a business, it’s important to establish your goals & priorities by asking yourself a range of questions. Consider if you’re planning on working in your business, or if you’d prefer to generate passive income & appoint a manager. Take into account your prior work experience, as this can be a great indication of what industry you may be suited to. Understand the reasons behind your decision to purchase the company and what you intend to accomplish through the acquisition. Doing so will allow some pieces of the puzzle to come together. However, it’s important to accept that some aspects of your plan may naturally change throughout the duration of the process. Ultimately, as long as you have a guide with your priorities, goals & preferences outlined, you’re on the right track!
Research
Once you have answered some of your own questions and ultimately figured out what industry you’re most suited to, it’s time to do some necessary research. Take the time to gain a relatively solid understanding of your desired sector, as well as the market dynamic & competition levels. This will help you determine the scope of opportunities available to you as well as prepare for any potential risks, further assisting with your big picture.
Work With the Pros!
The most valuable step you can take to ensure you get the seamless purchase you deserve is to enlist the expertise of a business broker. Professional business brokers will help you find a business that works within your criteria. Once you’ve found an ideal business, they will navigate you through the entire process from due diligence to negotiations. As the saying goes, it takes a village! Having a team of seasoned professionals on your side such as lawyers & accountants will provide you with invaluable guidance, resulting in confidence that you’re well on your way to a successful acquisition!
Don’ts:
Don’t Rush
Making the decision to take control of your future by purchasing a business is undoubtedly exciting. However, it’s important not to act impulsively. You must ensure that you’re making informed & realistic decisions. If you’re interested in a particular business, take the time to evaluate it properly and gain an understanding of its true nature & potential. By doing so, you will have an accurate picture of the business and how it aligns with your goals.
Don’t Ignore Red Flags
It may be difficult to face little issues that disrupt your ideal vision for the future. However, it’s extremely vital that you stay vigilant for any warning signs or potential red flags that may arise during the business buying process. Some key areas to consider are financial statement inconsistencies, regulatory violations & lease information. No business is perfect, but it’s better that you address your concerns in order to reach a resolution than assume everything will work out. A business broker will be able to help you navigate these issues and get the answers you need with full transparency.
Don’t Do It Alone!
Purchasing a business through a brokerage and utilising the help of a professional business broker is one of the smartest steps you can take towards a successful acquisition. But it doesn’t just stop there! Engaging the services of a financial advisor early on, particularly one who specialises in business finance, is a crucial move to assessing your funding options. No matter how passionate and well-versed you may be in your industry of choice, there will always be risks that you may not be aware of. Experienced & specialised professionals can help you mitigate risks, stay prepared and ultimately… keep you on your path towards your business goal.
There are many steps to buying a business. By following the aforementioned steps and avoiding common mistakes, you can increase your chances of success and achieve your goals as a business owner.
If you’re interested in buying a business, get in touch with a LINK broker today on 0800 568 001 to chat about your options.
