Nowadays, starting a business to become your own boss has always been an attractive option for many of us. In fact, becoming own boss is a big dream achievable either by buying an existing business or starting a new one.
Some people manage to achieve this dream by setting up their own firms. However, have you thought of buying an established business to do what you want? Depending on your situation, this might be a great option for you.
This is especially great if it’s the business area you’re looking to move into. However, you just don’t join the bandwagon of entrepreneurs who are into buying an existing business.
There are some things you will need to understand if you’re considering this type of move. Below are a few tips on how you should go about it to get the best experience from this exciting venture.
Check you can buy into a business
You might find yourself in the position to buy a business because you’ve got some capital that you want to invest in. Or it might be that you’ve found a struggling company that you can turn around using your own experience, or you want to grow your own brand by acquiring a competitor or supplier.
Whatever it is you want to do, you need to make sure that you’ve taken everything into consideration before you start the process. Have you taken into account how long it’ll take to complete the transaction?
Also, remember that the business you’re buying may have contracts in place, so you will need to either honour them or renegotiate them. Even if you’ve been diligent throughout the process, you might find there are problems that you only appreciate once you get in.
Any existing employees will need to be on-site, too. Don’t forget that you’ll almost certainly have to pay for certain professional services during the purchase as well, so make sure you choose wisely when it comes to picking a lawyer or accountant. If you’re buying a medical practice, for example, you may wish to appoint a healthcare solicitor to help you with the purchase.
See what’s happening in the local area
If you’re looking for a business to buy, its potential could be affected by where it is located and what will happen there. Has the area gone through any demographic changes, or does it have the potential to modify existing products/services to match a new potential customer base?
Take this example of an orthodontist buying a practice. He settled on one that was in a rapidly-growing suburb that had a number of other businesses also starting up in the area. He also engaged with the community by taking part in local events and demonstrating his commitment to them.
Have a plan in place for after the purchase
So you’ve agreed to buy a business, and the sale is going through – now what? If you’re buying an independent business, then it’s best to have some steps in place to make the transition easier for management and employees.
You should do an audit of processes and practices already carried out by the business, so you can learn about the organisation and identify any gaps.
Make sure you communicate with existing employees and get to know the company culture. If you make any changes, plan them carefully and be upfront about any you implement.
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