5 Important Questions to Ask Yourself Before Buying a Business

• November 8, 2021
• Richard Willis

Starting a new business journey can be an exciting experience, without a doubt. And as an entrepreneur, you might find many interesting business opportunities along the way. However, as with any type of business, there are plenty of things to consider. Here are 5 important questions to ask yourself before buying a business.

5. What am I looking for in a business that I would like to buy?

When looking for a business to buy, knowing what it is you’re looking for in a business will help you narrow down the search significantly. You can keep in mind a few things, such as:

• Whether the business has a proven strategy for success in place.
• Whether there is an established customer base.
• The financial history and current state.

4. How much money do I need to purchase a business?

Businesses can vary in prices significantly. Many things come into play here – the location, value, customer base, and much more. You will need to do your research and look into how much an average business in your desired location would cost and how much you would need for the down payment.

3. Do I have enough funding to buy the business, and what other finance options do I have?

Once you’ve identified the amount of money you will need to be even considered as a qualifying buyer, it’s time to crunch some numbers. Determine exactly how much of your personal funds you have saved up and compare it to what you’ll actually need. Buyers usually receive loans from financial institutions or other third-party lenders. However, you’ll have higher chances of receiving a loan if you have an excellent financial track record and a higher than the minimum required amount to cover the first part of the purchase price.

2. How do I know that the information provided by the current owner is accurate?

It’s important to keep in mind that the seller should always present all the necessary documents that verify crucial figures, such as profits and other figures. This process is commonly referred to as “due diligence,” and during this time, you will have the opportunity to check all the information and ask questions that will help you ensure that everything is how it should be.

1. Which experts will I need to hire?

Buying a business can be a complex undertaking, especially if you’ve never done this before. And even though some businesses that you know of have been sold without the help of professionals, it’s always suggested that you engage relevant experts, such as a business broker, an accountant, or a lawyer. They will use their expert knowledge to triple check all the documents and offer guidance if needed.

Are you planning to sell your business but not sure where to start? We’re here to help. Contact us today and begin the process with the help of experts!