What You Need to Know Before Buying a Business

The days have long gone when it was only men who bought businesses; these days there are many women who own and run their businesses very successfully. But to do so, you cannot expect to buy into any business without knowing anything about it. You need to have training in small business management and experience in the industry, otherwise your efforts are likely to be in vain. Here are some pointers to help ensure success if you want to buy your own business.

  • Get work in the same industry that you are interested in before you attempt to buy a business. If you want to run a restaurant, become a waitress. If a resort in some exotic location sounds good, work in one first. Learning the ropes from the ground up will give you a good idea of how everything works and whether you have the staying power and interest to make it through all the hardships of owning your own business.
  • When you are ready to go ahead, befriend a reputable lawyer and accountant and take their advice in all things to do with your business, from whether you should buy it at all to whether you really need to upgrade. It is easy to get carried away with your plans and waste money you may need for more serious purposes, such as paying off the loan.
  • When looking for a business, make sure it is something that you enjoy doing, otherwise you are likely to lose interest and then your business will be doomed from the start.
  • Research the industry and research the business you are interested in. Ask questions, but not always of the present owners. Unfortunately, people can’t always be trusted to tell the truth, especially about the state of the business financially. Part of your research for a retail enterprise would be to simply spend time in the vicinity to see how many customers they get. Investigate the lease, their contracts, the debts the business might have and so on, then run it all past your accountant and lawyer.
  • If you are in need of finance, before or after your purchase, you may be eligible for a government grant. There are many available especially for women, for different purposes to do with business.
  • Get an independent valuation of the business to ensure it really is worth the selling price. Most are not; the owners just want to get all they can. You can make a counter offer.
  • Make sure any promises the current owner makes to you are in writing. Your lawyer needs to make your offer conditional upon the promises being kept, so you can withdraw your offer without any penalty if they don’t keep them.