In most cases, when looking to buy a business, one will receive financial reports, projections, a description of the business, and the presentation will show the business in a positive light.
We have more than 35 years’ in the business world, helping to purchase businesses, helping to ensure proper and effective checks and balances are in place for those looking to buy a business.
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The first step in buying an existing business is to be sure that this is your favoured option. One needs to consider the alternatives:
- Starting a business from scratch
- Buying into a business, becoming a part owner
- Buying a Franchise
Once you have analysed the pro and cons of each option, and decided that purchasing an existing business is your preferred choice, then you are ready to proceed.
Purchasing an Existing Business: How to Proceed With Care
The normal procedure is that the Buyer will meet the Seller who will explain the business. The Buyer will be given financial reports, projections etc. to be taken away and studied. The Buyer will then email questions based on the meeting and the paperwork, and depending on the answers, will decide whether to make an offer to purchase the business, and at what price. After that, Accountants and Lawyers will be called to commence Due Diligence.
The problem with the above is that no expert advice has been taken at the early stage. Immediately after meeting, and receipt of paperwork, is the time that a Buyer needs to contact an expert in purchasing businesses.
This Business Adviser will help the Buyer analyse all the information received, based on many years of experience, and together will determine if the business is really attractive. The Adviser will also help determine the correct offer price, because even though any offer is subject to Due Diligence, once an offer is made, perhaps on the high side, it is difficult to retract.
Now Due Diligence can begin. Accountants will check the veracity of all the financials, whilst Lawyers will confirm all key contracts are in place, and the robustness of the contracts. Does that mean there is no further need for the Business Adviser?
Far from it, there are many areas now where business advice is critical. For example, the competitive landscape, the industry itself, the morale of the staff. Equally important, are any key personnel planning to leave, or key suppliers, or key customers.
A good Business Adviser will work together with the Accountants and Lawyers, and will ensure that between them, nothing slips through the cracks.
Purchasing an Existing Business can be an extremely exciting option, with much potential. Taking expert advice early on, and throughout the process will help ensure that the right decisions are made, and that after the purchase, there will be no unpleasant surprises
Looking to Buy an Existing Business – Get in Touch
Advice to Buy has over 35 years’ experience in helping business buyers purchase existing businesses.
For further information:
Call Us – +44 203 807 3886 (UK)
– +1 646 586 2244 (USA)