Points To Ponder When Buying A Going Concern Business For Sale
One of the most important decisions in life is the choice of career for oneself
. The way we are cautious and over protective about our relationships, similarly, one has to be very careful about choosing the right kind of career for oneself for it shapes ones lifestyle forever.
Some people choose to be their own boss. Selecting the correct path in the multifunctional arena of business is a crucial step towards shaping ones future. It is wonderful to start from the ground level and take your business to another level but a smart move would be to purchase an existing business ready to be sold out. However every coin has two sides. Business buying and selling process is cumbersome. Buyer and sellers have to be cautious in their dealings.
It is the duty of the sellers to disclose adequate information about their business for sale so that buyers dont hesitate to contact them. Buyers have to make sure that the seller is trustworthy and has a good reputation in the market. Certain important things have to be kept in mind while purchasing a going concern entity.
Necessary analysis to be made out when buying a going concern business:
1.If or not a client base has been established over a period of time. If yes, sellers must mention details about the same.
2.Level of collaboration. It is helpful for the buyers in ascertaining the growth prospects and requirement of fixed capital for the business.
3.Financial statements ( Balance Sheet , Trading & Profit and Loss account )
4.Accounting Ratios ( Liquidity, Solvency, Profitability & Turnover )
5.Annual Turnover
6.Machine & manpower requirement.
7.Working days & hours.
8.Reason for sale of business. It is imperative for interested buyers to check the fidelity of the reason.
9.Time of sale or special offers & the most productive time of the fiscal year.
10.Striking features of regular and best selling products.
11.Promotional techniques (Online, newspaper, magazines, fliers etc.)
12.Owners preference about any specific aspect of business. (Nature, scope, technology, returns, customer base, flexibility and so on.)
13.License/fees.
14.Status in the competitive market.
15.On-going innovations or renovations.
16.Location (If the seller doesnt want to specify the location, he can also mention the city/region like Sydney in Australia.)
17.Details about the place of production &/or sale. (Rented/freehold)
18.Any one of its kind feature.
19. Stock market condition.
20.Risk factor involved.
The above mentioned steps would help buyers to make sure the business for sale is authentic and suites their nature, requirements and lifestyle. Sellers would also be able to sell off their business easily and early if they disclose all these details and certain others that the buyer wants to know.
by: Rebeca
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