Every year, millions of Americans leave their jobs in corporate America to pursue their goal of starting a business. Choosing to purchase and expand an established business is a significant move for most entrepreneurs, and it can be quite rewarding.
However, buying a firm may be time-consuming and difficult to negotiate, especially for first-time entrepreneurs unfamiliar with mergers and acquisitions. Consider hiring a competent attorney or CPA to assist you in planning your big relocation. A financial counselor can inform you whether your finances are sufficient and the time is perfect to buy a business.
It’s also essential to analyze the present industry and trends to discover which industries are expected to increase in the coming years. (To get started, read this CasinosBroker blog piece about current M&A trends and which business categories have the most prospects.)
Eventually, you will find a prospective business and meet with the sellers. Be prepared! There are some critical things to ask when purchasing a business. These are questions every buyer should ask their advisors, the seller, and themselves to ensure this is the best decision for them.
25 Questions to Ask When Buying a Business
Questions to Ask Yourself:
- Is purchasing the business the correct move for me?
- Does my husband support this business venture?
- Does this financial decision make sense for me?
- Am I prepared to buy, manage, and run this business?
- What abilities do I have to manage the business successfully? What skills will I need to hire for?
- Which aspects of this business are significant to me?
- What do I hope to gain from this business?
- Do I have access to working cash and funding, if necessary?
- Am I satisfied with the impact the business will have on my personal life?
- What will be my exit strategy?
Questions to Ask a Professional
- Is now a good moment to buy a business?
- Can I make a living and support the business?
- What do the financials show about this company?
- Is this company on track for growth or decline?
- How can I protect myself from prospective lawsuits?
Questions to Ask the Seller
- How long has the company been operating, and how long have you owned it?
- What is the owner’s position in the business, including day-to-day operations?
- How many hours a week does the proprietor devote to the business?
- What do the prior three years’ financials look like?
- How long have the personnel worked for the company, and what are their responsibilities?
- How dependant is the business on its owner, and how would the owner’s departure affect the business?
- What are some of the most significant issues the owner has experienced, and how have they been addressed?
- What abilities or attributes are required to run this business successfully?
- What is the company’s reputation in the industry and within the community?
- If the owner decided to develop the business, what prospects exist, and why did they not pursue them during their tenure?
These questions can serve as a starting point for the M&A process, but others will likely arise. Take your time and thoroughly research all areas of the business to ensure that it is as tempting as it appears. During the due diligence stage, you and your team of advisers will be able to thoroughly examine every aspect of the business, so take advantage of this opportunity to ask several questions about equipment, assets, the seller training period, personnel, and finances. As you prepare for an exciting new chapter, ask the important questions now to ensure this is the correct business for you.