6 Things You Should Know Before Buying a Business

By | January 25, 2016

buy-businessStarting a new business from scratch is not an easy business. You have to do everything right, from choosing the right business areas, giving the name and attractive, choose a strategic business location, to take care of insurance and a business license. The difficulties which prompted some of us to buy a business because it was more practical and easier.

However, behind all the conveniences that you get to buy a business, you should also pay attention to some crucial points. This is to prevent disappointment later. According to columnist Steven D. Strauss UsaToday.com in his book “The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business”, there are 6 important things to know before buying a business:

1. The reason why the business is sold

It may be a business for sale because the owner of the business when it had intended to retire and want to get cash. That is a good reason. Another reason may be that the business is troubled and the owner wants to sell his business almost collapsed. And it is certainly not a good reason. Business owners now are able to do anything to give the impression that his business was fine and profitable. However, he could not lie if it is related to the law because of lies or the provision of information that does not fit the facts can be considered a lie. So do not be complacent by simply relying on verbal information from the business owner. Get some referrals from business owners, namely those associated with the business. Talk to them to dig up as much information about the business you want to buy it. Also talk to other business owners who are around the business you want to buy.

2. The level of competition

Who will be the competitor of your business if you later become a business owner? Learn also how the present owners to communicate with them. Competitive advantage of what you would get if the business is already in your hands?

3. Intangible assets that can not be diverted

A number of successful businesses thanks to its owner. For example, the owner has a lot of colleagues and loyal relationships and did not hesitate to help, special skills, charisma, and so on. You must be sure that you can run your business properly when the business was in your hands later.

4. Changes in delayed

Observe carefully whether the business environment around is good or not. Does the government or potential competitors have a plan for the area where you are?

5. It should be changed

Also make sure that the facilities and infrastructure are still in good condition. Are the decorations are outdated? What about the water and electricity there? Of course you do not want to buy a place of business that keep you stuck at a high cost. For this reason (as well as the purchase of a home), any offer you make should consider the examination premises.

6. Profitability

The reason that drives you are interested in an established business is that you want to be able to accurately estimate the profit. The only way to do that is to learn as much as possible from sources of literature with the guidance of your accountant. Ideally you should look at a series of books published at least two years.