Buying a business

Buying a business can take time, energy and a fair bit of research. It can be less risky and more affordable to purchase an existing business than to start one from scratch, but it is important that you do your homework to ensure that you buy the right business for you, and that you pay a fair price for it.

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Where to find a business to buy

Businesses for sale are often advertised in print media and online, but sometimes business opportunities can be misleading. Make sure to do your due diligence before you take action. Try trade publications or commercial investment magazines, or talk to a broker who specializes in a specific industry. Networking at business events can help get the word out that you are looking to buy.


What kind of business should I buy?

If you buy an existing business, you have two choices: franchise, or traditional (independent) business. There are advantages and disadvantages to both.


Independent business:

Evaluating a business

Before deciding to buy a business, you should evaluate its condition and potential. Think about the following things:

If a business is doing poorly, examine what the potential causes are. It may be a case of poor management, or inadequate resources. If you think you can turn it around and make it profitable, you could stand to gain from your investment; on the flip side, you are taking a big risk if it doesn't work out.

If a deal seems too good to be true, chances are, it probably is. Learn how to determine what type of business you should buy.

Determining how much to pay for the business

As a buyer, it all comes down to knowing what you can afford before negotiations start. You should be flexible in your negotiations, but also keep your budget and the value of the business in mind.

What is the value of the business?

Talk to clients who buy directly from the business. It is better to find out the reputation of a business before you sign on the dotted line. Banks are more receptive to a business that has a proven track record.

Final considerations


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