A staggering 80% of startups end up failing because they’re not bringing in enough money. However, it’s still possible to break out of the 9 to 5 grind and run your own business.
One way to reduce risk is by buying a business that is already up and running. But, how do you buy a small business with no prior experience? We’re here to help.
In this brief guide, we’ll cover the most important tips on how to buy a business so you can move forward with confidence. Let’s get started.
1. Figure Out What You Want to Buy
First, you need to take the time to figure out what kind of business you’re interested in buying. While the possibilities are pretty much endless, it can help to choose a business that you like and already have experience in working.
For example, if you have experience working in retail stores, it might make sense for you to buy a boutique. While ultimately your end goal is to make money, you’re more likely to find success if it’s an industry you enjoy.
2. Find a Good Seller
Who you buy a business from is almost as important as what you decide to buy. When looking for a potential seller, you want to find someone who is responsive to phone calls and emails and who believes in open, honest communications.
Buying a business is often not a quick process, so you need to find someone who will be willing to talk to you, listen to you, and answer any questions you may have. Ideally, you’ll find someone who already has previous experience selling a business to make things even easier.
3. Understand Exactly What the Transaction Includes
The process of buying a business requires you to be very detailed. Before you finalize the decision, make sure you know exactly which aspects of the company you’re buying.
If you’re buying a retail store, for example, will your purchase include the existing inventory as well as contacts for manufacturers? Does it include the lease for the space or existing employees? If you don’t know what you’re getting (and what you’re not getting), you’re setting yourself up for failure.
4. Hire a Lawyer
Even once you have a thorough understanding of what the purchase includes, you need to have a good lawyer on your side as well. Your attorney will work with your best interests in mind, drawing up legal documents and looking over everything to make sure you know what you’re getting into.
When choosing a lawyer, be sure to select one that has experience with contract law and business transactions so nothing is overlooked.
Now You Know How to Buy a Business
Buying a business is not for the faint of heart, but it could be one of the best professional decisions you’ll ever make. Keep these tips on how to buy a business in mind as you go through the process and you’ll be one step closer to fulfilling your dream of being a business owner.
For more advice as you go through this journey, be sure to check out our other business articles that are full of helpful information.