1. There are no perfect businesses . . . . . . . don’t expect to find one.
2. If after reviewing the information you initially like a business, have the broker arrange a meeting for you with the owner.You always learn more when inspecting the business and talking with the owner.
3. Ask the business broker any questions you can think of. There are no stupid questions.
4. Picture yourself as the owner of the business you are considering. Ask yourself what you would do to improve the business.
5. If you have other investors or partners - find out specifically how much they will contribute, what their expectations are, relative to return on investment, and keep them involved throughout the process.
6. If you find a business you like - make an offer based on your valuation and risk assessment. Finding a business is difficult and if you delay you may miss a terrific opportunity. Don’t be put off if your valuation is way below the asking price - still make the offer, you may be pleasantly surprised.
7. Make sure your acquisition criteria are realistic. Such as, have you sufficient cash or equity to purchase the business? When do you want to take over the business?
8. Don’t over-borrow. Maintain a reserve in the event the business may require additional working capital in the future.
9. If you are migrating into a new region, consider renting a home while searching for the right business. It is also tax advantageous to borrow against a freehold home, therefore timing of purchase of business and home needs to be planned.
10. Use accountants, solicitors and finance advisors who have experience in “deal-making” and remember - not all do. Their inexperience or attitude could cost you more than their fee. Don’t forget – they are working for you!
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Top 10 Tips for Buyers
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