Many people and businesses dream of freely owning and managing businesses or growing through mergers and acquisitions! It is common to come across situations of people and small and medium-sized enterprises engaged in saving funds to start their own business initiatives to be developed.
Unfortunately, as business environments change rapidly and continuously, many entrepreneurs rightly consider acquiring existing businesses less risky than starting new businesses from scratch.
There are many benefits to buying existing assets (or asset shares).
Above all, however, lies the greater probability of reducing the risk of closure after new business start-up. On average, it is estimated that over 30% of new businesses are exposed to a risk of closure in the first two years of activity, a percentage that rises to 50% in the first 5 years, 66% in the first 10 years and 90% in start-ups. technological.
Here are some important tips that it is advisable to follow in any case, BEFORE buying an existing business, understanding the reason why the seller is selling, evaluating financial, legal and many other aspects. Here are some key questions:
1) What is a reasonable goal to achieve?
2) Which documents to collect are valid for more than one alternative comparatively?
3) How to evaluate the correctness of the sale price?
4) How to prepare a SWOT analysis (strengths and weaknesses, risks and opportunities), an economic and transition plan and a break-even point? (where you lose or start earning)
5) How to create an offer and protect yourself from risks?
6) How to find and organize the contribution of any co-investors?
7) How to conclude the sale, validate documents, check goods, plants, offices and human resources?
8) How to ensure a way out if the investment fails after 12/24/36 months, recovering at least part of the investment?
If you need assistance or advice of any kind in this regard, we are available.
Please contact us through our 'contact' page!