Many people and enterprises dream of owning and operating a business or growing by M&A. It is not uncommon to hear stories of people amd SMEs saving every last cent they earn to start their own company and watch it flourish. But, as business and economic landscapes change, more and more prospective business owners are opting to buy existing businesses instead of starting from scratch.
There are many benefits to buying an existing business, but above all else, business owners have a higher chance of mitigating risk of closure than by launching a new venture. After all, it’s estimated that “30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first ten.”
Here are some basic steps which it is advisable to follow; before buying an existing business it is advisable to gain insight into what to look for in a prospective business, understanding why business owners sell their businesses, evaluating a business’ financial and legal standing, and more.
1) Which is the goal to reach ?
2) Which info and docs to collect for more than one option ?
3) Why owner/s is/are selleing ?
4) How to evaluate a business ?
5) How to prepare a SWOT analysis, a business + transition plan, a break even analysis ?
6) How to make an offer and be protected against any risk ?
7) How to find and organize the funding and the possible investors ?
8) How to close the sale and secure documents, goods, plants, worksites and human resources ?
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