Buying an already-established business can be a much safer alternative to starting from scratch. See below our guide to buying a business from viewing the business, to making an offer to completing the purchase.
As you begin the process of buying a business you need to establish your budget.
A business can very often be part funded but it is unlikely that 100% finance would be available.
The key is to ensure that you do not overstretch yourself so that you have sufficient cashflow when you actually start running the business.
If you are looking to secure a bank loan then you will need to produce financial projections demonstrating how you will manage cash flow and, more importantly, repay the loan. Dependant on the sector, banks will normally require a minimum of 10% to 50% of the business purchase price as a down payment.
A business plan can be daunting for new business owners, but it is a very helpful tool to ensure you’re clear about the purpose of your business. Writing a business plan for your business will not only clarify your business ideas but also define your long-term objectives.
5 Reasons to write a business plan
If you were buying a house you would use the services of an Estate Agent, it therefore makes sense when considering buying a business that you would use the services of a Business Transfer Agent such as Business Sales Plus who are experts in their field.
Choosing the right business can be a tricky process but with the helping hand of Business Sales Plus the buying process is fully explained from making an offer, carrying out due diligence and completing on the purchase. It is important to do your research by thoroughly checking the information a seller has provided some professional advice from an Accountant or Solicitor to satisfy yourself that the business is a good investment. You can then make an informed offer for the business.
As part of the buying process you will needs the services of:
Using the knowledge of these professionals ensures you perform the due diligence of the business.
The ramifications of missing an important legal loophole can be disastrous when buying a business. It is essential that you instruct a solicitor experienced in business transactions and check copies of all contracts and legal documents such as leases, purchase agreements, distribution agreements etc.
You may also need to verify that the business is adequately insured and that required licences and permits are valid. If you’re inheriting employees as part of the deal, it makes sense to learn everything you can about the terms and conditions of their contracts.