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Businesses for Sale
One approach to owning your own business
is to buy someone else's. Frequently, busineses
of all kind and condition are put up for
sale. They may be available because the owner
is retiring, looking for a change, or unable
to make the business work. There can be several
advantages to this approach; an existing
business can offer:
- customers, employees, and suppliers that
eliminate start up delays
- established location
- reputation in the community and/or industry
- historic perspective on future earnings
Some entrepreneurs look for businesses for
sale in particular industries or markets
where they have skills or see a bright future;
others, with an interest in management, are
more interested in finding "broken"
or "unrealized" businesses than
they are in what the company does. With a
little time and effort, you can find the
business that meets your requirements.
Once you've identified an opportunity, the
more you understand about the business, the
better you can determine whether a tantalizing
opportunity is really a good bargain. Things
you should consider are:
- the reason the business is for sale
- reputation with customers, suppliers, and
employees
- assets, debts, and contractual obligations
- the constraints that have kept the business
from growing
- working capital and financial commitments
- the accuracy, veractiy, and realism of the
financial information
- potential future competition from the seller
- any current or foreseeable litigation
- what skills and ability the seller brought
to the business and your ability to perform
relative to him
Finally, discuss with the seller the potential
for ownership transition -- something available
only when you buy an existing business. Even
if the seller was the reason for problems,
you can still learn a lot about the mechanics
of running the business by being able to
tap into the seller's prior experience. |
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