We all know that the process of buying a business can be complex and frustrating. While there’s due diligence to carry out and legal hurdles to get over, one of the biggest challenges is actually finding the right business in the first place.
Various factors can hamper any attempt at acquisition, from the lack of businesses being sold in a particular location to asking prices that are way above market value.
Here’s our quick guide to searching for your ideal business.
Why Are You Buying?
There are any number of reasons you might be looking to buy a business. You could be trying to expand your own company and capabilities and linking up with an established business is the sensible way to go about this. Perhaps you don’t want to build a venture from the ground up but would prefer to take over a business that already has a proven track record.
Whatever the reason, you really need to understand why you are buying and, more importantly, what kind of business you want to purchase.
Searching the Listings
The good news is that you don’t have to step onto the street to find businesses for sale, there are plenty online tools to choose from. That doesn’t mean you should take everything you see on business sales sites at face value. As with any large investment, you need to do your homework. Listings should provide a good description of the business you are interested in, including its turnover, asking price and details such as recent refurbishments and staff numbers.
Build Your List
It’s rare that you’ll find the perfect bargain out there, whatever you are trying to buy. There will, however, be things that you don’t want to compromise on and it’s worth building a list of these before you start looking. Any goal setting needs to be realistic and achievable and creating a check list should help keep you on track through the whole search process.
Which businesses you choose may be constrained by a variety of factors including the industry and location. You can undertake a good deal of research online nowadays to help cut your list of possibilities down to a manageable number. Once that is done, it’s time to do some deeper research, including paying the business itself a visit.
Putting Your Team in Place
Buying a business requires having a good team to help support your endeavour. You may well be using a broker who will help find the right business and carry out tasks such as performing due diligence and you need to make sure your whole team is fit for purpose. That includes accountants and solicitors who will hopefully be ensuring the purchase go as smoothly as possible.
Be Prepared to Wait
Finally, with such a big investment, you must be as objective as possible and the means taking the advice given to you as well as listening to your gut when things don’t appear quite right. It’s much better to wait or step back from any potential deal if you have issues rather than trying to plough ahead regardless – what you don’t want is to get 12 months down the line and find you’ve made a mistake.
Obviously, this can be difficult when there is competition for a particular business but you need to be prepared to wait if all the cards fall the wrong way.