Buying a Business
Buying a Business
You don’t have to be a rocket scientist to know that there is an element of risk in any investment. However, there are ways to minimise that risk, and buying a business is no different from that point of view. One way to reduce your risk is to buy an existing business that has already demonstrated an ability to successfully operate. That confidence does come at a price as you'll generally spend more to buy a business than to start one from scratch. If you've got access to the funds though, it's a good option.
A Safer Alternative
While there are no guarantees in business and the risks must always be considered and managed, buying an established business clearly offers significant advantages worth considering if you want to own your own business. In order to buy the right business, you need to investigate it's past performance, operations, current status, staff, management, competition, industry and its future potential, all of which is so much easier to do with an existing business. We at Wollermann & Associates can help guide you through this process. After all, we want you to make the right decision, because we want you to come back to us when you are ready to sell. In fact, much of our business comes to us that way.
Are you serious about buying a business?
... maybe you need to ask yourself a few questions.
How long have you been looking for a business?
If your answer is “a long time” then maybe you need to redefine your parameters. Remember, the perfect business for you probably does not exist.
Have you seen a business you like? If so, did you make an offer on it?
This is a good way to test your courage.
Consider how much you need to earn from a business. Let’s say you invested $200,000, how much would you expect to earn from the business? The real answer to this will depend on the industry you are buying into.
How much can you comfortably invest in a business? Consider the asking price of the business and the availability of cash and potential borrowings and current debt you already have. What securities can you provide to a lender?
Who will run the business – is it just for you or will your partner/family help? You need to have a serious discussion with anyone else who will be involved, now, not later.
If you have been in business before, what have you learned that will assist you in your next business?
What skills do you possess, and will they help you run your own business?
If you are currently employed, have you definitely decided to leave your job?
Why do you want to buy a business?
What do you see as the main criteria for the business that you want?
How far will you travel to the right business?
These are just a few of the considerations you will need to address, and we are ready and waiting to help you.
Have a good browse around our site and give our brokers a call if anything grabs your attention, we will be pleased to help you with the process.