Buying a Business
Purchasing a business is yet another aspect of starting a company that can be difficult. The main thing to do is to exercise patience and perseverance.
Don't give in and purchase the first one you come across. Do your due diligence. Hire professionals to help you out with the analysis.
While the process can be a struggle, it is rewarding once you have hit the end. Then, the new excitement of running a company begins.
How to Receive the Best Price
Finding the right company at the right price primarily revolves around having an extensive network of contacts. The more people you know, the more opportunities that arise.
With more choices from which to choose, you now have the power to reject less than attractive offers. Eventually the right one will come up.
The primary consideration to keep in mind is how passionate you are about running that type of business. The more you enjoy a certain task, the more energy you will dedicate to it.
Know the reason why the seller is selling. Once you know, you will have additional leverage when negotiating the final price. Divorce can be a situation where you may be able to negotiate a very favorable deal.
Get to know the seller well. Once you know his personality, you will have a good idea of how he ran his business. If he doesn't seem like he was doing a good job, you may be able to negotiate a lower price.
Be sure to know what's included in the final sale. Not all sales will include all current assets of the company. Does the sale include the brand name, client database, and inventory?
When you purchase, be sure to remember some clients may leave. They may have preferred working with the previous owner.
In some cases, the previous owner will stay on and train you on his company's practices. This can help you avoid many bumps when first beginning. And, you may be able to keep all the current clients.
Assembling a Team to Assist in Your Purchase Decision
If you aren't sure how to make a good purchase, consider hiring an attorney, accountant, or consultant. Having their help can help you negotiate a more favorable deal.
But, don't just hire anyone. Many professionals are just sitting there waiting to drain your money. You simply won't see eye-to-eye with many others.
Work with someone you trust, and who appears to have your best interests in mind. True professionals realize by putting your interests first, you will in turn put their interests first.
How Much is a Business Worth?
Determining the true value of a company really results from agreement between the buyer and seller. You may be willing to pay a higher price if you strongly believe in the future potential of the company.
Conversely, you may not be willing to pay so much, given the current low earning capacity of the company. Once you have decided to buy a business in Australia or around the world, there are many factors to consider. Think things through carefully and make a decision.
About the Author
This Wiki was written by Andy White, CEO of Biz Trader .