When Buying A Business, Consider These Principles - Forbes

"Continuing my series on buying a business, here are a few points when considering this ownership option.  Thanks to Russell Brown’s “Laws of the Business Buying and Selling Jungle” for the inspiration.

—Buyer beware – of himself.

In the securities industry, full disclosure is the coin of the realm. But in the marketplace, caveat emptor — let the buyer beware — is the fair warning standard.  If a seller misleads or misrepresents something, legal redress may be available. But business purchases that don’t work out are born more from inept buyers than from seller malfeasance.

—What’s a business worth?

Many metrics and factors are used to divine the value of a business, including strategic elements outside of the empirical. But primarily, you should focus on the business’s ability to generate earnings — net profits. With the exception of strategic factors, if the prospective business isn’t creating acceptable earnings and you don’t know how to change that, don’t buy the business."

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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.