5 Tips on How to Buy a Business | 9DOWNSOFT Finance
June 8th, 2010
Owning a business is the best way to become your own boss. Many people want to start a business from scratch. There are a lot of disadvantages of starting from scratch. You will have to build new customer base, spend lot of money in marketing, hiring employees and creating cash flow. So, if you what to learn how to buy a business which will produce instant cash flow, then you need to follow several critical steps before you look for an existing business for sale.
First thing you need to do is look for something that you have interest and may be have some experience.
The next thing is finding a good running business. There are lots of good businesses available to purchase, and at the same time there are lot of business which are just a failure. The best source to find business for sale is internet. You can also look in trade publication classifieds and consider contacting company owners directly, as well as attorneys, accountants, bankers and the local Chamber of Commerce.
Once you find a business you like you need to do due diligence. Basically you start you investigation of finding out all you can about the company. Here are few things you should look for before buying a business:
Check the financial records of the firm for the last three years.
Check to see if the seller does not owes back state sales taxes, because you could be liable after you purchase the company
Make certain that all the equipments are paid for. You don’t want to purchase a business, and have a part of it repossessed.
Find out the value of the business you want to buy. What you should actually pay for it? Business valuation is not very easy. It’s common in business valuation to use several different methods of valuation to arrive at a price. Beside these steps there are lot of other thing you need to know on how to buy a business which will get you life time of success and happiness.
Check the financial records of the firm for the last three years.
Check to see if the seller does not owes back state sales taxes, because you could be liable after you purchase the company
Make certain that all the equipments are paid for. You don’t want to purchase a business, and have a part of it repossessed.
Find out the value of the business you want to buy. What you should actually pay for it? Business valuation is not very easy. It’s common in business valuation to use several different methods of valuation to arrive at a price. Beside these steps there are lot of other thing you need to know on how to buy a business which will get you life time of success and happiness.
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