3 Things to Know When Buying a Business
In the case of my client, the current year-to-date numbers, when projected out, showed a significant decrease over the prior year revenues. We searched the Internet for related businesses in his geographical area and, sure enough, found that in the current year a new competitor had entered the market, draining about 20 percent of the sales from our seller. Never underestimate the value of the Internet in assisting you with learning more about the area, the industry or general fiscal trends. This find resulted in a negotiated decrease in the asking price and terms of sale.
3. Buying a Business- Eyes Wide Open
Due diligence can be as straightforward or as complicated as the business that youre buying. The key is to learn as much as you can about the business so you walk into the deal with your eyes wide open. The more time you and your professional team spend doing the necessary leg-work, the better the chances are that you’ll buy a business without going-concern issues, at a fair price, with favorable payment terms and a tax-favored allocation.
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