Tips for Buying a Business

B E N C H M A R K I N T E R N AT I O N A L

TIPS FOR BUYING A BUSINESS

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Many individuals become business owners by starting their own venture. Others do so by buying an existing business, which is a huge responsibility. While there are certain advantages to buying an established company, a lot of hard work is required before and during the buying process.

A S S E S S Q UA L I TAT I V E FACTORS Typically, potential buyers will want to dig into financial statements and other key documents to assess a business. While this is recommended, a company’s profitability is achieved, in part, because of some qualitative aspects. Perhaps it’s the brand positioning, the sales team or a particular aspect of the product offering. Whatever it is, a buyer should dig into these aspects just as closely.

Unless a potential buyer is willing to purchase a business and operate it by themselves, it’s important to keep key people in place during the transition period.

This is an important aspect to consider, particularly for ventures that rely on contact with key customers as a primary means of selling their product offering.

Some sale agreements will have the selling owner remain during the intermediate period, receiving payments over time, or receiving increasing payments based on the business’s performance after the sale.

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