How to Buy a Company and Not Lose
Starting your own business can be done in two ways: you can either establish a new company and start everything from scratch, or you can buy an already existing business. When considering the second option, carefully weigh all the pros and cons.
Certain types of businesses require specific knowledge and work experience in that field. The most common reason for a business to fail is a lack of expertise, so it’s best to choose an existing business that aligns with your knowledge and skills. Additionally, you need to decide what type of business you want to operate, whether it’s manufacturing, trading, or service-oriented.
Once you’ve decided on the type of business, calculate how much funds you can allocate for acquiring and developing the business, including any potential loans you may need. Ensure that you have enough funds not only for the acquisition but also for initial investments (such as purchasing new goods, hiring new employees, etc.). If you’re confident in your financial resources, you can confidently move on to finding the right business.
People often search for companies in specialized newspapers, online classifieds, but the main and most reliable source is to gather information from company websites specializing in that particular sector. The main activities of such companies should include the sale of existing businesses, business valuation, and comprehensive legal assistance, such as obtaining licenses, certifications, and permits for the business. Not every business owner who is selling wants competitors, employees, suppliers, customers, etc., to know about it, so they choose a company that ensures confidentiality throughout the sale process. The sale of the company takes place “behind closed doors.”
Once you’ve found a suitable business, you need to uncover the real reasons for its sale. These reasons can vary: the business owner might want to change their business direction and pursue other activities, or they might simply lack the funds for further business development. Personal reasons should not be dismissed, as some people sell their business due to a change in their place of residence, or they grow tired of the business. You need to protect yourself from dishonest sellers who want to get rid of a business with no prospects, a damaged reputation, and significant debts.
Before purchasing a company, always verify its financial condition, whether it has any debts or obligations, and what the company’s reputation is among suppliers, customers, and employees.
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