When most people think of starting a business, they think of beginning from scratch and developing your own ideas and building the company from the ground up. But starting from scratch presents some distinct disadvantages, including the difficulty of building a customer base, marketing the new business, hiring employees and establishing cash flow etc.
In most cases, buying an existing business is less risky than starting from scratch. When you buy a business, you take over an operation that's already generating cash flow and profits. You have an established customer base, reputation and employees who are familiar with all aspects of the business. And you don't have to reinvent the wheel- setting up new procedures, systems and policies- since a successful formula for running the business has already been put in place.
On the downside, buying a business is often costlier than starting from scratch. However, it's easier to get financing to buy an existing business than to start a new one. Identify the industry you want to be in.
Step one of business acquisition is defining the type of enterprise you're looking for.
This will begin with a general decision of which industry to move into. You’ll need to research the mid-to-long-term prospects of the sector before moving forward.
Pay specific attention to legal concerns, changes in regulations, and look at local competition within the industry.
Trade magazines and newsletters are a good start – they provide expert opinion on the prospects of your chosen business.
Is It the Right Choice?
Buying the perfect business starts with choosing the right type of business for you. The best place to start is by looking at an industry with which you're both familiar and which you understand. Think long and hard about the types of businesses you're interested in and which best match your skills and experience. Also consider the size of business you are looking for, in terms of employees, number of locations and sales. Next, pinpoint the geographical area where you want to own a business. Once you've chosen a region and an industry to focus on, investigate every business in the area that meets your requirements.
Contacting a business broker is an awesome way to find businesses for sale. Most brokers are hired by sellers to find buyers and help negotiate deals. The assistance brokers can offer, especially for first-time buyers, is often worth the cost.
Transworld guarantees that our highly professional brokers will be able to offer you sound advice and insight into selling your business in your first meeting.
Good brokers turn down many of the businesses they are asked to sell, whether because the seller won't provide full financial disclosures or because the business is overpriced. Going through a broker helps you avoid these bad risks.
Helping you pinpoint your interest. A good broker starts by finding out about your skills and interests, then helps you select the right business for you. With the help of a broker, you may discover that an industry you had never considered is the ideal one for you.
Ready to talk about it with professionals?
Before you decide on selling your company, you owe it to yourself to call Transworld Business Advisors. There is no obligation, just a confidential conversation about how to sell your company and how much it is worth, now and in the future!