4 Steps to Buying an Existing Business

June 14th, 2013 by

Although we’ve already discussed methods for selling a business, we have yet to discuss purchasing an existing business. If you’ve always wanted to own your own business, but you don’t wish to start a company from scratch, you may have several options. Purchasing a small (or even a large) business may be one option that you could consider. Business owners might also be interested in purchasing another company in order to grow their original business. Try following these steps to finding and potentially purchasing a small business of your own:

Decide which type of business you’re interested in purchasing

Before you can start to look at businesses that might be for sale, consider which type of company you’d be most interested in purchasing. You’ll likely wish to purchase a business that you already know something about. If you choose to purchase a business in an industry you’ve never explored, you might end up overpaying for the company. Even if you get a fair price, you’ll still need to learn the ins and outs of the industry in order to ensure that it operates successfully.

Look for businesses that are on the market

You could do this in a variety of different ways. Once you’ve determined which industries you’re most interested in, try finding a company that may already be on the market. There are third-party business purchasing consultants that might be able to help you purchase a small business. If you choose to look on your own, try locating websites that could help you identify which small business may be up for purchase.

Do your due diligence

If you’ve found a business to purchase, the next step is to do your due diligence. An experienced accounting professional in Pittsburgh can help you determine whether or not the business is a good investment. You’ll want to make sure you look at both the current financial numbers and come up with a reasonable forecast of what profits could be for the business. Your accounting professional, along with an appraisal expert, may be able to help you determine how much you should offer for the business.

Figure out the paperwork

There may be lots of different paperwork involved when you’re trying to purchase a business. From figuring out licenses to deciding which aspects of the business you’ll purchase (such as land or buildings), you’ll need to sort out the actual mechanics of purchasing a business. Fortunately, there are plenty of resources for figuring out this aspect of buying a business. Once you’ve sorted out each of these aspects, you’ll need to set a date and time for signing the paperwork.

Remember that buying a business is a serious financial investment, not just now, but for the future. If you’re interested in purchasing an already-existing business, make sure you’re working with a professional accountant to ensure that you’re aware of your financial obligations. This could help you avoid many pitfalls now and in the future.