Buying An Established Business

When considering buying an established business it’s always a good idea to first ask yourself , is buying an existing business the way to go or would myself and the community be better served by starting a business from scratch?

If you answered that buying an already existing business is what’s best for you and your marketplace be sure to follow the steps outlined below to maximize your chances for success.

First you need to ask yourself “Am I getting into this business for the right reasons?” You need to be sure this business is worth you investing your time and that you have the management skills to make it happen.

First, is there a business for sale in the location or area I want? The easiest way to find this part out is to contact your local VR Business agent and discuss with them what you’re looking.

Once you’ve found the business through a VR business broker you want to figure out what the current worth of the business is. You can do that by taking the eight following things into consideration, good broker will help you obtain the business background information you need to be able to answer these questions.

1. Why are they selling the Business?
2. What are the Current Sales Trends?
3. What are the current cost, Fixed and Variable?
4. Analyze the current and past profits and attempt to forecast future earnings?
5. What Assets does the company have including land, intellectual property, and leases?
6. What out standing Debts does the company currently have?
7. Does the current business have an effective business plan or will I need a new one?
8. What is the reputation of the business amongst the community in general?

After answering the above questions and you’ve determined that this business is still for you; you’re going to want to work with your VR broker to properly setup the purchase and establish the capital to buy the business. The majority of the time the broker will handle the actual negation with the current business owner and use their expertise for a smooth business transaction. They’ll take the time to explain clearly and simply the terms and conditions of the sellers before you move on.

After all the details of the purchase have been worked out to your satisfaction you will need to find effective financing and capital for your new venture. A well rounded broker will also be able to help you identify the best financial opportunities for you.

You’ll also want to remember that while there are no guarantees in business and that you will want to be prepared to manage the risk, buying an established business noticeably offers majors advantages worth considering over starting out brand new.

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