Whether you are a seasoned business owner in need of a change or an aspiring entrepreneur who wants to be your own boss, buying an established business can help you skip the hassle of setting up, finding staff and building a customer base. However, even with a company that is up and running, there are some risks involved and it important to be vigilant to ensure you make the right decision. Here’s a few things you should do before buying a business:
1. Decide what really interests you
There are a number of profitable industries in the world so it is not necessary to buy a business in an area that you don’t like. In fact, it could prove detrimental because it is much harder to put your energy into something you aren’t interest in as opposed to something that excites and inspires you. Before you even look at businesses, write a list of areas that interest you. Your current hobbies and interests are a great place to start as you will find it much easier to motivate yourself if you choose a business in an area that you already feel passionate about. Furthermore you will know what you would like to see improved in the industry and how you would change it, if you were involved. Being a consumer gives you the edge because it helps you to see it from a customer’s point of view.
2. Consider your areas of expertise and talents
Although you might want to move away from what you already do, it can be helpful to consider what you have learned from working in your current industry. If you are currently employed could you purchase a smaller version of your employer’s company and improve it? It is also worth looking at what you are good at generally even if you don’t get to use these skills in your current job. How do you spend your spare time? Could you buy a business related to this? For example, if you enjoy collecting wines or wine tasting could you run your own wine shop? Are you good at arts and crafts? Maybe you could buy a business relating to this. It will make it much easier for you if you already have the talents in the business you want to go into.
3. Consider the details
When you have found a business that interests you, do your due diligence before you sign anything or part with any money. It is important to know what you are buying. Look at the debts and liabilities, financial statements, customer and supplier details, employee details and time spent with the company, contract details and leases if premises are included with the sale. You might be required to sign a none-disclosure agreement before you are given access to this information, but check with a lawyer before you do this to ensure it is all above board. Look at what is included in the sale and consider whether you are purchasing the assets or shares of the company. It is also worth thinking about how you will pay for the business, whether it will be in several installments or a one of price. When you are happy with all this, consult an experienced attorney to check over all the details and draw up the legal documentation.