This is a contributor’s blogpost …
We often hear a lot about innovative entrepreneurs who start their own business from nothing – and then, ten years later, they are a millionaire running their global conglomerate. But while this is, of course, admirable, what about the people who don’t launch the business – but who end up making it what it is? Not every single company you see will have had the same person/people at the helm since its conception. More often than not, the business will have gone through a number of owners, investors, and directors before it starts to turn a profit and gain recognition in its sector. So what happens when you are someone who is looking for a business to buy? Sometimes the best business brains can benefit from taking over an existing business, rather than trying to launch one themselves. There are a number of reasons for this, such as lower initial overhead costs and less of a need to market so fiercely. But, at the same time, that is not to say buying an existing business is not a challenge. You need to make sure you’re putting your money where your mouth is, and that you are not taking any risks, you might regret. Here are some of the top things to look out for when taking over someone else’s company.
If you have a good business mind, you should be able to turn your hand to just about any sector and somehow make it work. But, it makes sense to buy into a company you already have some experience with. For example, if you have only ever worked in auto sales, but now you want to run a bakery, you might find yourself in trouble should you fail to do the research. To play it a little more safe, think about your previous endeavors before you buy a business. A little experience can often go a long way.
Are all the loose ends tied up?
Taxes, owed money and payroll issues… if the previous business owner has messed up on any of these things (if he or she is selling the business, there’s a chance they may have done), you need to make sure they are all sorted out before you sign anything over. You can either leave the seller to it and hope that they quash their debts, or you can buy the accounts receivable and cut your losses that way instead.
Photo Courtesy of Link Humans via flickr
Put some time into the staff
If you are keeping on existing staff rather than outsourcing your own, make a conscious effort to get to know them. If the current team were close or loyal to the seller, you might have a hard time winning them over – after all, you are the intruder in this situation. But that’s not to say that you can’t get them on your side. Make time for them, and hold meetings with them to show that you value their opinions as much as the next person’s.