Most people would agree that buying an existing business can save you a lot of time and effort, as you no longer have to set up the business on your own – everything is already set up and established for you, including the operational processes, the products/services, the staff and crew, the location, and so on. But the process of buying an existing business can be a long one, so you need to take it step by step to make sure that you are doing everything in the proper way and will not lose out in the end. Buying an existing business can be a challenge, especially if it’s your first time venturing into this kind of endeavour. Here, then, is your essential step-by-step guide to buying an existing business: what you should know.
- Get advice from the experts
Once you have decided to purchase a business, you should get advice from the experts. Professional expertise can be quite invaluable when you have to deal with negotiations, valuations, and the actual process of purchasing the business. For these things, expert help from an accountant and a solicitor can give you the professional support you need. You can also look into seeking help and advice from a broker who can guide you through the entire process.
- Perform due diligence
Research is essential when you are looking into businesses to buy. For instance, you should research the business sector you want to enter, and this includes researching the best period to purchase a business. Once you have a shortlist of businesses you are interested in, it’s time to view the business and evaluate it. It’s essential for you to be as thorough as possible and make sure you record all the aspects you find or notice.
- Arrange for financing
If you are planning to get financing to buy a UK company, professional lenders will often require the details of the sale as well as details and particulars of the business, and they will also want the business’ accounts for the past three years. Lenders usually look for financial projections as well if the business has no available accounts, and they will also require details regarding your personal liabilities and assets.
- Make an offer
The 4th step is to make an offer for the business you want. You can do this by telephone or even online, but it’s best to follow it up in written form.
- Negotiate a period of overlap
Before you sign the documents completing the business sale, you may want to negotiate a period of overlap so that you can have time to familiarise yourself with the business before taking over. If you are purchasing the business’ premises as well, you may want to have an independent valuation and survey of the property, so you are sure of the condition of the premises.
- Completing the business sale
Even after you have done all of the above, the sale could still be hampered if you don’t meet specific criteria, such as the verification of financial statements, the transfer of the leases, the transfer of the licences/contracts, and the transfer of new or existing VAT registration. Make sure these are all done correctly, and you can begin your endeavour into the business world with complete confidence.
Image attributed to Pixabay.com
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