It’s Easy to Buy a Business but not so Easy to Sell One
I still meet far too many business owners who bought an existing business and paid far too much for the business. Carried away by hope and enthusiasm, they typically don’t investigate the business properly beforehand and fail to seek proper and honest professional advice.
After a while they often find themselves struggling in a very competitive environment without sufficient sales to support their financing costs or ever-increasing overheads and more often than not, lacking business experience or finance skills, gradually lose heart and enthusiasm to the point where after a while, they just spiral into decline or try and sell on in turn to a new hopeful, always optimistic business buyer.
Now this doesn’t have to be the case,
- For a start, getting a good honest, accountant to look at the business before it’s bought will sieve out the worst businesses for sale. Don’t take things at face value and never rely on any accounts or figures prepared especially for selling the business.
- Negotiate some vendor assistance. I’ve seen people buy businesses with no experience in that line of business and get just a 30 minute hand-over. Come on now, be realistic!
- Next, prepare some projections as to whether the business will support you and your level of costs. What is the break-even point and is there any leeway between that and existing turnover?
- Then, way before you go into business, make sure you get some experience in that line of business. If necessary, work for someone else first and learn the ropes.
- Get to grips with marketing. Read some books, look at what others who are successful are doing and maybe do some training in or get some coaching in marketing. Prepare a marketing plan, a practical plan not all theory. Nowadays, being in business means doing a lot of marketing.
- And then finally, do some research on, take advice on and get some decent financial systems in place. It’s essential that you can keep track of your performance and know what’s going on in your business.
Then, and only then, if it all stacks up, and you are fully prepared and ready to go, should you proceed and buy the business. Once you’ve moved in, borrowed the money from the bank and personally guaranteed the lease it’ll be too late to back out!
If you’re thinking of buying a business contact Nick on 0800 ASK NICK or email email@example.com.