You may have many questions and concerns regarding selling your business. You may have started a business from scratch and had much success wit it, but now you are looking to retire, start a new business, or simply just taking a break.
There are several benefits to buying an existing business rather than starting a business of your own. When starting a business, the risks are higher, with many businesses failing in the first year and 80% failing within five years. However, purchasing an existing business reduces an entrepreneur's risk, tipping the risk - to - reward ratio favorably, while creating opportunity for increased profit and growth.
WATCH FOR THESE WARNING SIGNS WHEN BUYING A BUSINESS
It is a common assumption that the main reason people want to buy a business is to make money, or often specifically, "to get rich". Obviously, buyers do not want to buy a business that fails to earn enough money for them to live on. When buying a business, a buyer looks for one that appears to at least be able to support whatever size family the buyer has.
There are many factors to consider when buying any business, but here are some to consider when you are interested in buying a franchise:
Only one out of approximately 15 of potential buyers will actually buy a business and it's important that sellers be aware of what buyers go through when considering business ownership, especially for those who have started their own business and have forgotten their own experiences prior to buying their business.
It's important that a business owner looking to sell be able to prove the success and value of the company's earning potential. For investors, particularly, as the "excess" cash in a business, after paying expenses and employees, demonstrates what will be used to pay investors or back to the owner.
Full disclosure will improve your chances of qualifying and create a more cohesive lender relationship
Is your company prepared for the changes? With changes in the healthcare arena, Patient Protection & Affordable Care Act (PPACA), more companies are looking for ways to keep up with the demands the federal government has placed on them.
Engineering based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property. This reclassification results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.