Purchasing a Business Made Easy

Business Acquisition Consultancy

Purchasing a Business Made Easy.

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Buy an existing business

What are the advantages and disadvantages of buying an existing business?
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Buy an existing business

What are the advantages and disadvantages of buying an existing business?

The main advantages are time and money. You don’t have to build a business from the ground up. On the physical side, there will be ready-made premises, with all facilities, including computers and phones ready and working.

To find, and set-up new premises is both time-consuming and potentially quite expensive. There will hopefully be trained staff in place, while recruiting from scratch, and then training staff takes time and money. Most importantly, the business will have customers and suppliers, saving you from the arduous task of finding suppliers that excel in price, quality and service, as well as trying to build up a customer base from zero which is extremely hard work.

There are two main disadvantages, Firstly, one has to put down a sum of money to buy a business, and secondly, one needs to be careful not to get lumbered with a ‘failing business’, that looks good on the outside.

Things to watch out for

When buying an existing business one must be careful to check certain areas.
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Things to watch out for

When buying an existing business one must be careful to check certain areas.

There are many areas that need to be checked, but some of the obvious ones are often overlooked. Are you actually buying the ‘business’ or only buying the assets of the business. The latter is often the better route, as you avoid the potential pitfalls of any historical problem the previous company may have had, such as lingering litigation, or disputed taxes.

One of the attraction of the existing business is its premises which seem perfect. But if they’re rented, has your lawyer checked that the lease allows a transfer to a new entity. Debtors are an important asset of any business, and how you value them will have a large impact. Of course you will look at the age of the debt, but have you checked how long it’s been since that customer last made a payment.

Why are they selling?

If the business is as good as the sellers say, why are they selling the business?
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Why are they selling?

If the business is as good as the sellers say, why are they selling the business?

The most common reason people sell a Business is because the Business is not performing as well as it was. But this reason is rarely stated by a Seller who doesn’t want to put a Buyer off.

The reasons most often put forward are :

– New opportunities suddenly appeared, too good to miss
– Getting older, no longer have the energy to run the Business well
– Need a change, been doing the same thing for too many years
– Continuing difference of opinion between partners

All these reasons may be true, and of course frequently are. But you need to be alert, to look into and understand the financials. The first goal is to discern what is really going on, irrespective of what the sellers claim, and the second is to determine if you have the capability to handle a Business that is, in fact, in decline.

Get In Touch

Tel: +972 549 469 421
Email: blast@advicetobuy.com

Testimonials

I was hesitating before buying the stationery distribution business that I had been looking for. Mr Last showed me that even though turnover was modest, the base of quality customers was a potential springboard to build sales.

Derek Chile

The restaurant looked perfect, as did the financials. Our only question was why would anyone sell a successful business like this? We asked Benny Last for advice, and within a very short time he pointed out that the Turnover was growing at a slightly faster rate than the net profit, which showed a slowing of the net profit margin.

Alison Graves

Benny saved us time and money. We sent all the documentation we received from the specialist toy manufacturing company straight to him. Within 24 hours, he responded, telling us that the largest customer (45% of sales) was related to one of the current Directors.

Dennis Albright

“Having worked with Benny over many years in relation to the sale and purchase of businesses in different sectors across a number of different jurisdictions in UK, Europe and the Middle East, he always adds considerable value to clients by providing incisive analysis and advice which goes to the core of the business and it’s pricing. His experience, wisdom and commercial acumen, combined with his negotiation skills, add great comfort and protection to those he advises. He is always great fun…

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Business Help

Purchasing a Struggling Business
How to Buy a Business
Purchasing an Existing Business

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