Among those folks who want to own their own business, some build a company from scratch. That’s not the only option. Purchasing a company already in business may be a good alternative. If you are interested in acquiring a business instead of starting one, here are things you should consider.
- Do you want to purchase an independent business or a franchise? Each opportunity presents a unique set of circumstances. With franchises, you are part of a systematic network built around an established name. There may be stringent requirements regarding the systems and procedures you must follow as a franchisee. If you opt to purchase an independent business, you may enjoy the benefit of increased flexibility, but this approach will require more research and business development to acquire the same level of recognition as an established franchise.
- Does this business suit your lifestyle? Your desired lifestyle is an important consideration. Different businesses often require different lifestyles. If you purchase a restaurant, you will have to be at the restaurant when most family gatherings occur. For some, that is a sacrifice they are willing and able to make. Other industries and businesses call for frequent travel. As an owner, you must understand what you value and what you can handle.
- Have you done your due diligence? You must conduct a proper and thorough due diligence when purchasing an existing business. This process requires digging deep into the business records to understand the business’s history and more accurately predict its future performance. When conducting due diligence, hire an experienced business lawyer to ensure that a full examination occurs. Your due diligence search must include an in-depth analysis of the financial statements. Your search should include information about the company’s past or ongoing litigation.
- Is there additional information available through the personnel? As part of your investigation into the business, spend time speaking to and understanding the people. These people include the owner, employees, and customers. When speaking to the owner, gain an understanding of the owner’s motivation for selling, and any challenges and successes the owner has experienced. Also, talk with employees. If you acquire a business, you also inherit the workforce, and their attitudes towards their work and their experience in the company will provide valuable information.
- Are you ready? Although you may avoid some challenges involved in starting a new business, purchasing an existing business is still plenty of hard work. It may require upfront costs that exceed those of brand new businesses. The process can be tedious because some companies have hidden risks that remain latent until the due-diligence stage. And, remember that funding the enterprise is required.
We are here to help. Whether you purchase an existing business or build one from scratch, our experienced team at Generations Law Group is here to help you evaluate your options and choose what is best for you. We also provide a wide range of legal services to help you protect your investment of time, money, and energy. Call us at 208-401-9300, or visit our home page, www.genlawgroup.com, and Book An Appointment.
We look forward to working with you. Thank you. Tom Walker