Business Buying Tip: Prepare documents beforehand
April 8th, 2008 quantumBuying a business requires a major commitment on a buyer’s part. Not only will it have a financial impact, but it will likely produce a significant life-style change. The buyer’s life is certainly influenced by how he or she earns a living. Most people purchase existing businesses to achieve one or more of the following objectives:
• Quick return on investment
• Instant cash flow
• Obtain a business with an established credit history and existing vendor relationships
• Trained employees
• Established customer base and reputation.
• To secure a long-term job.
Obtaining a good business at a great price should be your goal (if you acquire a “great” business, then more often than not, you will be forced to pay a huge premium since you are paying for the past and not what the what the business is capable of in the future). Therefore, it is usually preferable to purchase a good business and then make it great. Achieving a great price requires being respectful of the business accomplishments of the seller while using objective facts to disprove the seller’s calculation of the list price. In addition, there are numerous other factors that come into play, including the manner in which you structure the purchase, your ability to “finance” the purchase price, the cost of money in the financial market, current industry expectations, marketplace demand and last but not least, being in the right place at the right time.
Another important aspect that shows the commitment and sincerity of a buyer is the preparation of all the necessary documents before hand. Remain organized throughout the process of identifying and focusing on a business to purchase. For each business opportunity you identify, maintain a file with the following categories:
1. Accounting and Financial Section
2. Owner Questions Section
3. Sales Section
4. Marketing/Advertising Section
5. Industry Information Section
6. Competition Section
7. Customers Section
8. Personnel Section
9. Suppliers/Vendors Section
10.Licenses/Permits/Filings Section
11.Offer To Purchase Section
12.Legal Section
13.Due Diligence
14.Other Section
15.Financing Section
Approaching the challenge of identifying and then acquiring a good business requires the right outlook and proper preparation. Rely upon Quantum’s Buyer Program to guide you through the Business buying procedures toward finding a lucrative business opportunity.
Visit Quantum™ Blog and know more about the complexities involved in a business deal.
