Buying and Selling Business: An Overview
What to know when buying or selling a business
Over 250,000 businesses change hands every single year. The majority of these businesses are small but a few are mid to large companies. The small business sales never make the news but we tend to hear about the billion dollar acquisitions of the fortune 500 firms. You do not have to be a billionaire to become involved in the buying and selling business, but you do need to be driven, competent, and willing to work. Here are a few examples of things to keep in mind if you are interested in selling your business, buying a business or simply flipping a business for a profit.
Purchasing a Business
The purchase of a business can be a very daunting task. There are thousands of papers to look at and untold amounts of time with the lawyers. No matter what kind of business you have or may be looking at there is always someone interested in buying. However, actually buying a business requires much work behind the scenes. A reliable team of business experts should help to decipher the legal notices, disclaimers and purchasing documents. There should be a clear delineation of process and expectation as well as timelines for both the buyer and seller.
It is also important to determine whether or not you are interested in a franchise or a stand-alone business. Buying and selling a business is all about managing your risk and your reward. Franchises have inherited benefits but they come with strings attached. Stand alone businesses are much more prone to failure but they have a potentially higher ceiling in the long term.
Selling a Business
If you are looking to sell a business, then you too have much work to do. Lawyers call this due diligence. This process will require that you understand the ins and outs of your business. You are going to be asked for all financial records and to disclose all clients. When selling your business, you should consider it a very thorough medical examination. The prospective buyer wants to know all the gory details before they sign the dotted line. Take the time to prepare all the paperwork beforehand and be able to justify your asking price for the business.
Selling and buying business models or businesses all together can be a very rewarding and profitable venture if you have the ability to spot a good deal, as well as the foresight to see how you can improve an established business. Many of the success stories that we have heard are very rare. While it can be possible to sell your company for millions or billions, this typically does not happen overnight. Success is possible but it rarely happens in an instant. The Self Employed has a great article on flipping a business.
If your long term goals include buying and selling in the business world then you need to familiarize yourself with those that are already in the business. Take the time to network and grow relationships. These relationships will benefit your career and they could make it much easier for you to do business in the future. The buying and selling business can be yours if you put the work in.
Are you considering selling your business? We can help you. Contact us anytime at?http://www.newgatecapitalpartners.com/contact/