Buying A Business

MATCH MADE IN HEAVEN OR…

On Buying a Business

So, you’re thinking about buying a business? This could be a big opportunity. Chance to increase, maybe even double your revenue. And you eliminate a competitor in the process. Hmmm…new customers in store. Sounds like a win win for you. However, you might want to take a step back. Ask yourself a few questions.

First of all, are you buying the assets or the business? Let’s say your seller is an LLC or corporation. Our advice? You don’t really want to buy stock in the business. There could be legal problems lurking just around the corner. That said, if it’s the only way to get the deal done, you’ll have to negotiate knowledgeably. Okay? Next question?

Ever consider the work involved in combining two businesses? What will the message be to customers? Your employees? And you can’t forget your vendors. Then there’s the lease. How will you renegotiate it with the seller? And your customer contracts? Are they easily transferable? What if you don’t need all the employees to stay? Oh, and one last thought. Will those risks that were overlooked in early conversations, suddenly appear after the deal’s closed? Feeling a bit overwhelmed?

Questions aside, let’s say you go ahead with the merger. Before you do, just a couple of thoughts. Are your two cultures a good fit? Will anyone be resentful? And while you’re figuring out all of the above, who’s taking care of the store? Serving your clients? Making sure they’re happy? And about eliminating that competitor…in a market where contracts go out to bid, companies are still required to seek a certain number of proposals.

If you’re having any second thoughts, let us put your mind at ease. Yes, there are risks but there are also rewards. Buying or merging with another company could put you and your business in the driver’s seat. To ensure that it does, give us a call. We see good things down the road.

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