(Akiit.com) Found a business that you’d like to buy? Here is a short guide to some of the things you need to consider when buying a company.
Why buy a company?
For many aspiring business owners, buying an existing company can take the hassle out of starting a business from scratch. It’s less risky and you can make a much quicker return.
If you already own a business, buying another company could be a way of expanding your sources of income. It could be the beginning of your very own business empire.
Of course, buying a business does come with many challenges. Some entrepreneurs may prefer the freedom of starting their own business. Those that want to run a business without having to worry about the shaping of the brand may prefer to buy a franchise.
Identify your method of funding
Buying a company costs a lot of money. You may be able to sell assets or use savings to fund the purchase. If this isn’t an option, there are other forms of funding that you can look into.
Many buyers borrow money. Just like buying property, you’ll need a large loan, which may require a large deposit.
Alternatively, you could seek the help of other investors. This is a popular funding option and some buyers may find it preferable to having debt, although it does mean that other investors will own shares in the business.
Get the right professional help
You’ll need the support of professionals when buying a business. Legal support will be necessary for handling all the legal paperwork required when buying a business. Financial advice meanwhile could also be useful when exploring funding options as well as going over company finances to check that everything is in order. If you haven’t already got a company in mind that you’d like to buy up, you may also want to approach business brokers to find out which businesses are going for sale.
The professional help that you require may depend on the type of company that you’re buying. There are many specialist guides online such as this dental practice checklist that can help you with the intricacies involved when buying a specific business. There may even be books that you can buy.
Set aside enough time
Buying a company is a lengthy process. In many cases, there is a transition period in which the previous owner slowly hands over responsibility. This gives you time to understand all the ins and outs of the business before you’re given total control.
It’s important that you get to know the employees during this time – they may not take well to a new business owner swooping in without any introduction. Spend a lot of time working with any senior employees so that you gain their trust. It could also be important that you introduce yourself to important and long-running clients. If they are allowed a couple months to get to know you it will be less of a shock when you assume ownership.
Staff Writer; Paul Brown