Businesses For Sale
This is a very challenging process and to achieve a successful purchase you require good advice, planning and above all, plenty of research.
Important things to look for :-
- How long has the business been operating?
- The strength and history of the industry group to which it belongs
- How long has the present owner owned the business?
- The Vendors’ reasons for selling – this sometimes require a bit of detective work to locate the “true”reason
- The financial trend of this business and industry group in general, is it a fading industry or is it on the ascendancy?
Buyers buy for a reason and price a business accordingly. The three factors that determine the final offer are :-
- Return for an investment
- Return for effort
- Return for risk
Checklist once you have found a business :-
- Verify the financials
- Review staff and necessary skill sets required
- Make sure you have enough in reserve to fund debtors and creditors
- Check out the competition
- Look at sales history
- Profile the customers
- In the case of a freehold going concern purchase, study the Section 32 and make sure he property is suitable for the purpose of future plans you may have
- If a leasehold, get a solicitor to study the Lease for any issues that may not be obvious to a layman
- Look at finance options to ensure that you can finance the purchase with reserves for stock and working capital
- Engage accountants and solicitors who have experience in business transactions and if possible those who have worked in this industry
- Do not sign anything without first running it past your accountant and legal advisor