I am buying a business, what are the relevant tips?
Buying a business seems to be an exciting thing to do, yet it can also be a fraught with danger. There are number of tips to keep in mind, when acquiring a small business. It goes without saying that you should hire a professional adviser (accountant) who can examine the financial records, before you actually enter into “buying a business” contract.
- First of all, clearly analyze what you’re expecting with this new business-as owning a new business can be rewarding as well as a bad experience for you.
- Observe the turnover, profit and loss statement; analyze the sale figures-do they add up yearly.
- Be aware with over inflated valuations, whether it’s actually worth what the previous owner is telling you.
- What about the years trading! Don’t be fooled seeing wrong sale, profit and loss figure of the company.
- Go through the details of the working of business, financials, what’s the day to day running costs and more.
- Observe thoroughly the assets of the business. They can be in the form of property, equipment, intellectual property, contract(s) and of course the staff.
- Know the liabilities, I mean the debts, bank loan, unproductive office staff, faulty machineries, highly paid employees and others.
- If the company has any legal dispute it can be a massive headache for the new owners of company.
- Whether the company is competitive or not, as a little competition is necessary to survive in business market.
- Not to speak that a business is judged by its workforce or employees-so know about them.
- Not the least-longevity of business-that is the actual bottom line for business stability