Buying an Existing Small Business
Buying an existing small business. Steps to buying a business. What you must look out for when buying an existing business.
Steps to Buying a Business
Here’s an even more exciting area of business opportunity: buying businesses. Important strategies and advice to keep in mind:
Buy businesses, not business plans
Some successful businesses will try to sell you business plans. These are ‘template businesses’ that require you to put in a significant amount of effort to actually get the business up and running.
Look out for potential
Be careful about the way you understand the word ‘potential’. The business you buy should already be up and running and making real-time profits! Beware of those businesses that sound really good on paper but just do not seem to net you any money.
Negotiate the Purchase price
How should you make an offer for any business? A good rule of thumb would be four to six months of the net profit of that business. Buying a business is like buying real estate – look for motivated sellers! While there will be many over-priced businesses for sale, all you need is one business selling at an excellent price.
By following this four-to-six-month rule of thumb suggested by guru Kirt Christensen, you would be able to make your money back in four to six months, even if you just bought the business and did not do anything about it.