Buying a Business

Valuation is what a business is worth, as in “this company’s valuation is $10 million.” This would mean that a company is valued at $10 million, or worth $10 million. The term is used most often for discussions of sale or purchase of a company; it’s valuation is the price of a share times the […]

Remember “caveat emptor” — let the buyer beware? That used to be the law of the marketplace. Not anymore. Today, consumers have clout.
State consumer protection statutes are meant to protect consumers from unfair or deceptive practices and often go beyond the traditional legal remedies available for breach of warranty. Laws like these are on the […]

A business plan is normally essential to the process of purchasing a business. A good business plan always defines the business’ specific mission and objectives, new ownership, sales focus, market, strategy, management team, and financials. This is particularly important when you are purchasing an existing business, because there is so much uncertainty involved.
Start with existing […]

Buying an existing business is an excellent option that is often overlooked by entrepreneurs, but it does have advantages. You will have an established name, existing customers and an immediate revenue stream. However, searching for a business to buy can be difficult, and finding the right one to buy is tougher yet.
The process can be […]

There are so many questions to ask when considering the purchase of an existing business. In fact, there is not enough room on this page to list them. But let me give you a few examples that relate to financial, marketing, ownership and operations:

Most importantly, why is the seller selling? The answer will either raise […]

Consider this scenario. A wife and husband are in the starting stages of negotiating a price for a florist shop that is being sold by an elderly lady who is selling, “because her children want her to retire.”
Since her husband died five years ago, the business has been going downhill, and for the past three […]

When valuing a business for sale, start by reviewing basic financial statements.
Example: A husband and wife have been working in his father’s small business for almost four years now. They would like to buy his small business from him. It is a independent copier/fax dealership located in a small town.
They know the market potential and […]

For some people, buying an existing business is a better option than starting from scratch. Why? Because someone else has done much of the legwork for you, such as establishing a customer base, hiring employees and negotiating a lease. But if you want to buy a business, you’ll need to do some thorough research to […]

When buying or investing in a business you need to evaluate that business carefully. One tool is the Investment Analysis.
The Investment Analysis table gives you discounted cash flow analysis including Net Present Value (NPV) and Internal Rate of Return (IRR). Both of these are important financial analysis tools that will help a business present itself […]

When you are trying to decide whether to buy into a franchise there are several factors to consider.
First, make sure you are looking at a solid and effective franchise that offers real value. It has to be a good one. There are hundreds of good ones, but lots of bad ones too.
With a franchise, you […]