BUYING A BUSINESS: WHAT YOU NEED TO KNOW
When most people think of starting a business, they think of beginning from scratch--developing your own idea and building the company from the ground up. But starting from scratch presents some distinct disadvantages, including the difficulty of building a customer base, marketing the new business, hiring employees and establishing cash flow - all without a track record or reputation to go on.
In most cases, buying an existing business is less risky than starting from scratch. When you buy a business, you take over an operation that's already generating cash flow and profits. You have an established customer base, reputation and employees who are familiar with all aspects of the business. And you don't have to reinvent the wheel--setting up new procedures, systems and policies--since a successful formula for running the business has already been put in place.
Bankers and investors generally feel more comfortable dealing with a business that already has a proven track record. In addition, buying a business may give you valuable legal rights, such as patents or copyrights, which can prove very profitable. Of course, there's no such thing as a sure thing--and buying an existing business is no exception. If you're not careful, you could get stuck with obsolete inventory, uncooperative employees or outdated distribution methods. In the worst case scenario, you can overpay and set your self up to fail, even before you open up your doors.
This seminar will help you understand the process of buying a business and how to evaluate acquisition opportunities, including:
- The steps of buying
- Evaluating a business
- Understanding price, terms, and tax structure
- Reviewing previous tax returns, financial reports and projections
- Financing and credit
- Legal considerations