Sometimes your business is to buy someone else’s business: maybe a restaurant, or another type of franchise. It’s a huge decision that shouldn’t be made lightly; there are many factors to consider before making that next step to buy a business.
Buying a business is ideal for many because it allows you to become an entrepreneur without having to start from scratch. Many people find it easier to buy a business than deal with all the legalities of creating their own LLC. Many businesses in the United States change ownership each year. That number could continue to grow as members of the “baby boomer” generation retire.
How can you know for sure if buying a business is the right move for you? What should you look out for before deciding which business to buy? The expert legal staff at Handin Law answer some of these questions.
The Buy-A-Business Checklist
The first order of business when it comes to buying a business is making sure you choose the right one. Ideally, you should choose one that you’re passionate about, and believe you can build upon its message and/or products.
But while these visions are important, there are other factors to consider, such as:
Stick to What You Know
If you have prior experience with restaurant ownership, then logically, owning a restaurant might be an ideal step for you. The same goes for prior experience in retail or other specialties. It will be better for you to choose a field that you not only have history with, but also genuinely enjoy. You aren’t just selling food or products, but an experience. Find a business that already aligns with your goals and ideals. The learning curve of taking on the current business model will be easier and less stressful than having to learn a completely new industry.
Look For Businesses That Are Already for Sale
Once you’ve decided on the business you want to buy, the next step is to find a business looking for new ownership. You can do this by searching Craigslist ads, the classified section of newspapers, attending industry conferences, working with a business broker, or simply asking people in your existing network if they know of anything available.
Know Why the Business Is Changing Hands
There are plenty of valid reasons that a business is looking for new ownership. In many cases, the owner would simply like to retire after a successful career, but don’t want the business itself to end. However, there are other reasons you should be concerned about, the biggest being financial concerns. Be sure to talk to the current owner about the challenges they’ve faced in their business, how they solved them, as well as what approaches, or techniques haven’t worked. You should ask yourself whether you are able to come up with different, if not better, solutions for these challenges.
Beware of Red Flags
That said, be on the lookout for some red flags, such as a poor business plan to begin with. If there’s no market for the service or product, a new business owner won’t change that. Ask about any existing business debts, as these should be taken care of before closing a sale. Sometimes a business idea is great, but the location isn’t ideal. Or perhaps the issue lies with bad branding or PR: maybe the current owner said something on social media that upset or turned away customers, and now their business is tanking.
Carefully consider any of these issues if they come up; ideally, discuss them with an attorney before signing anything binding.
Buying A Business in South Florida
If you’re thinking of buying a business, it’s best to talk to someone who knows the ins and outs of business law. At Handin Law, we are fully knowledgeable of these laws, as well as existing legal codes and guidance to help you make the right decision. To learn more about our legal services, call us today at 954-796-9600.