If you have decided that you don’t want to start a business from scratch, and that buying an existing business is for you, there are a few things to consider that may or may not occur to the first time business buyer:

Location-specific problems

Many small businesses end up on the market because of personal reasons related to the owner, like retirement or a family illness. If businesses you are considering are on the market for another reason make sure the reason is not an emerging threat in the area. A large competitor moving in or a change in traffic patterns that will be very disruptive to business are reasons to perhaps forgo this business and find another one.

Reputation

This issue is simple to address in the age of internet reviews and social media. Make sure you do your homework on any business you are considering. If you do find out the business has a bad reputation, it may not necessarily be a bad thing. For instance, a restaurant with a reputation for bad service can easily be rebranded and outfitted with a new and more customer-friendly staff. If you discover a bad reputation, try to determine if it is something that can be amended with rebranding or changes you are able to make.

Liabilities

As a new owner, you don’t want to be surprised your first week with unknown liabilities. When you buy a business, you inherit more than just the equipment and inventory. Any liabilities left by the old owner will now be your problem. Any debts, unpaid taxes, and impending lawsuits will end up on your plate if you don’t find out about them beforehand. This can easily be avoided if you are thorough during the due diligence phase. Ask your business broker for help with discovering any and all liabilities during due diligence.

The message here is simple. When entering into business ownership, you will need to make sure you have all of your bases covered. Use the due diligence phase and the expertise of your business broker to be completely and totally thorough in your examination of any business- long before you are handed the keys.

Are you looking for a business to buy, but have concerns with the businesses you have found so far? Please feel free to leave us a comment or question here, and we will be happy to help you on your journey to business ownership.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com