There are various advantages to buying an existing business if you are not as interested in starting from the stretch.
For one thing, when you buy an existing company, someone else has probably already done a lot of the startup leg work like verifying that there is a market for your product or service, creating a good customer base,hiring a skilled team, and negotiating a lease.
The major factor of buying a business is doing the right research so that you can be confident enough to do what you are doing.
At Startup City Magazine, we have come up with a step-by-step process from the beginning stage of finding the business, negotiation, due diligence and closing the business deal.
No matter if you are doing this onyour own or you are taking support from a business broker thereis some general concern, you need to take;
Whether you are going to buy a Small and Medium Enterprises(SME) or a big company, you need to decide the type of business. It depends on the types of work you have done in your life.
People mainly make this mistake to buy a business they know little about. Beyond selecting something that you know and understand, even better if you can land on something that you love. Itis less difficult and a lot more fun.
Once you have decided on the type of business, start your search. Ask business associates and friends for leads to similar businesses that may on the market.
Many of the best business opportunities surface by word of mouth and are snapped up before their owners ever list them for sale.Newspaper ads, magazine ads, trade associates,real estate brokers, and business suppliers are some other ways to explore.
It is completely fine to use a broker to help locate a business opportunity. A broker is an expert professional who has been in the industry for a long time.
He will help you from the steps of negotiation to due diligence on the business's history and finance and closure. Having a business broker supplements you in the process as he has done his research about the company and the industry.
Before making your final decision, make sure to check all the business's certified financial records like Cash flow statements, Balance sheets, Accounts payable and accounts receivable, Employee files, major contracts, and leases and more.
This review will make you clear about the company you are buying and will alert you to any potential problems
Ask all important questions to the company's CEO about the business related to company assets, potential or on going litigation, anyworker's compensation claims or unemployment claims, commercial leases and major contracts, trade secrets, patents, registered trademarks and more.
When you have thoroughly investigated a company and now ready to go ahead with a purchase first, make sure that you and the owner or the CEO of the company are agreed on a fair purchase price.
Also, brush up on the key elements of business valuation. After this, create a written sales agreement and possibly have a lawyer review it before you sign on the dotted line.
This is all about how you can buy a good running business in India. Often visit the Startup City Magazine website to stay updated with the Indian Business Industry.