How to Buy a Business in the UK – A Simple Guide
Purchasing a business can be a rewarding and profitable venture: you get to skip all of the start-up hassles and risk of building your own company, and instead enjoy the rewards of fruitful hard work performed by others. But, as we’ve started to notice, not all businesses for sale are created equal. The quality of offerings on the market will differ dramatically depending on numerous factors. This article is designed to provide clarity about these differences so that you know exactly what to look for when buying a business in the UK.
Buying a business
If you want to be successful, you need to plan the acquisition and integration of your new business with care and execution. You must first understand what you’ll be buying: is it a Trademark and Licensing agreements, assets and liabilities, intellectual property ownership; do the current owner perhaps have an unfair advantage over their new shareholder; is there a tax liability? The first step is to get all the information you need on the company for sale. A thorough due diligence will reveal any potential problems and help you get a handle on what this type of expense could cost in the future. These issues include whether or not business debts will be assumed by new owners, if future payments on leases or contractual obligations will come with the asset. Be sure to assess the financial health of the business and its projected cash flow and profitability, and assess risk factors such as foreign currency risk, litigation, compliance issues, investments.
The advantages of buying a thriving business
Why buy your own business instead of starting from scratch? Buying a business can often be more advantageous than launching a start up because you have an established customer base, loyal employees and existing revenue streams. In addition to this, buying a company is a much less risky investment if the company already has their foot in the door and suffers from less market risk. Buying a business is an excellent option for most people. Successful businesses consistently generate profit and it is possible to start making money right away. Whether you are looking for an investment or want to create your own business, buying the right business can be challenging. Here are some of the most important points that should be considered when buying a business in the UK.
What expenses come with buying your own company?
This is largely dependent on the type of company you are buying. Generally, however, the necessary expenses will include things like solicitor fees, accountant fees, valuation fees, stamp duty etc. Buying a company is usually an expensive process. The taxes and fees associated with buying your own business can be quite significant. If you plan to purchase a business using your personal finances, this will depend on how much money you can afford to pay upfront and borrow from a bank or other lending institution. The tax implications of taking out the loan will determine how much you end up paying back in the long run, but many factors contribute to this.
How to buy a ‘sole trader’ business in the UK
A sole trader business is a small, self-employed company with one owner. A Sole Trader may trade as a Limited Company or Partnership but they are not obliged to do so. If you want the uniqueness of being the only person in control of the decision making process, managing your own investment and taking all profits, then this may be for you. To own a ‘sole trader’ business in the UK, you need to find franchise opportunities. It can be done through online searches, asking for recommendations from professionals or just by speaking informally with people in your industry. For example, speaking to fellow owners of small restaurants or supermarkets might give you an indication of popular franchises.
Considerations for buying an online/international company
It’s more than just picking up the phone. Earlier this year, I went about looking for a business to buy. The initial ones that I found only had a couple thousand pounds in revenue which were mostly local and brick and mortar shops. At that point I read this article and it got me thinking maybe I should consider another outlet. After finding a few more companies, one of them was an online business listing international jobs and rental property in the UK. All the moves made sense when you think about it because since its less expensive than purchasing locally you can add much more value over time–adding international jobs will allow it to eventually produce enough revenue to
Tips When Buying A Business
One of the best things to do is to go over any potential business’s books, including their financial records. This will give you an idea if there are any discrepancies in the financials, and if the person selling hasn’t tampered with them themselves. When considering the purchase of a legitimate business, there are many common pitfalls that sometimes befall new buyers. With that in mind, this article will provide some hindsight on scenarios that the buyer may not have anticipated upfront.
One of the questions I believe it is essential to ask when looking to buy a business, is “What’s my budget?” Both the cost – or purchase – price and any additional overhead that may come into play as a result of living or running the business should be taken into consideration.