Buying a business doesn’t have to be an arduous task. If you know what you’re looking for, you can get the right answers to your questions to make a well-informed and profitable decision.
When you are looking to buying a business, there are a few details that are overlooked during initial purchase discussions that come as quite a shock further down the line. By hammering out the small print as early as possible, you can reduce the number of negotiations you have, in turn minimising the documentation drafts you need. In the long run, this can save a substantial amount of capital you would have otherwise spent on legal fees.
To help you with your purchase, here are the four vital areas to evaluate when you are looking to buying a business.
Have you clarified if you are merely buying the business or its assets too? When looking to purchase you want to make sure you are also buying the assets. This could mean any physical assets such as any employees, trading stock, property, land, or machinery as well as intangible assets and intellectual property.
During negotiating you have the luxury of cherry-picking the assets that you wish to acquire. There is, of course, the added tax bonuses. By buying the assets, you only pay tax on what you paid, not what the soon-to-be previous owner would have paid at the original point of purchase.
It is a good idea to find out what the deal is on any properties you are taking over. If the properties are currently leased, it is vital that you establish the terms of the current contract. How long is left on the lease? What will happen to the price after the tenancy expires? It might be worth speaking with the landlord to discuss a new deal so that your rates are fixed for the next decade or so. You will also need to make sure they are comfortable maintaining the contract under new ownership. Another factor to consider is the security deposit. Often the seller is expecting you to buy them out of this, so make sure you cover all your bases first before doing so.
Social media accounts, hosting, PPC, marketing, IT services, internet service etc all come with a subscription. Some business owners opt to pay for these services in advance and so when it comes to changing hands, the seller will want the deficit reimbursed. In most cases, this is perfectly acceptable, and pending review, the services are most likely beneficial for you and your soon-to-be new business. However, it is common for these additional extras to be excluded from the initial agreed-upon purchase price and snuck in at the point of closing. Asking the right questions in the first instance can ensure there are no nasty surprises at the end. Plus it gives ample time for reporting to be provided so you can see the benefits of what you’re buying into.
As with most businesses, employees are the lifeblood of the organisation. They are on the front line and know the ins and outs of the internal systems and processes, as well as being the vital components in your business-customer relationships.
The concept of a business changing ownership can strike fear into the minds of current employees. Especially when it comes to job security. It is vital to give them the peace of mind that by the time of taking over, their jobs – if they are – are completely safe, but more importantly, you need to make sure that the team are the right people for the job. Is there a thriving, desirable environment in the office with performers that have a vested interest in the success of the company? Or will keeping on the workforce leave you with a team of dead weight? By taking the time to get to know the employees, you’ll get a better understanding of who you are buying into. It is also a good idea to maintain a healthy relationship with the seller during the transitional stages too: at least until you are comfortable with the books and smooth running of the organisation.
There are a number of elements within a business you want to look for to make a profitable decision. If you’re looking to buy a business, we have hundreds of existing businesses for sale right now. Coupled with our accurate and up-to-date advice and service, we can help you make the right choice. You’ll find a complete listing of our businesses for sale here.
Times are hard for employees and they have been for a number of years. It’s a difficult decade for the ambitious career-builder, particularly those in the hard-hit public sector. Our jobs become ever more uncertain, yet simultaneously our bosses are piling on the work and stressing us out. Income growth hasn’t been exactly stellar either.
How do you break free and find a more dependable source of income. A career where you’re less pressured and where the rewards are greater. Maybe it’s time to consider taking on your own business?
Many people think of small or medium business ownership as something that requires a lot of thought, drive and entrepreneurial flare, but it need not. To run your own business you don’t always need that start-up spirit. Businesses often change hands, and existing small and medium-sized businesses come to market to be sold as going concerns quite regularly.
You can buy you into an enterprise to run for your own living. Imagine it. Be your own boss, and leave all that unwanted pressure behind. Of course, running your own business comes with its own pressures, but these are so much less when it’s something you want to do.
Make 2017 the year you break free from the shackles of your thankless drudge. Get your voluntary redundancy pay-off and do something you really want to do. Owning your own business may not make you your fortune, but it stands a better chance of making it than grinding your spirit into the dust in a world of wage freezes and waste-cutting exercises.
Find out more about the types of businesses for sale by visiting Business Partnership. You never know, you may just find that self-reliant future you’ve always dreamed of. What have you got to lose?
Starting or buying your own business, whether it’s Industrial, Service, Innovation or the Café you’ve always dreamt of owning, is a hugely important decision.
After taking that step, you are faced with opportunities, rewards, challenges & disappointments, all in equal measure. Most of the time you love it, sometimes hate it but it will be the most fulfilling career experience imaginable. Owner managed businesses are very special, having the ability to make instant decisions to react to whatever lies before us & reap the benefits, while others continue to sit and ponder gives us the confidence to grow & achieve. Making the most of what each day brings, having the desire, tenacity & ambition to make the business the best it can be, better than the competition & providing an experience that ensures our customers return time & again, whatever our industry.
All business owners are faced with the same challenge. At some point, we have to consider an exit strategy: to sell, have a succession plan or simply close. It is important to consider an exit strategy early, as it will affect decision making during the life of the business & to enable the best future outcomes.
If the decision is to sell (or consider selling, it’s never too early to plan a sale), then engaging the services of a professional business broker is essential. Someone who will engage personally with you & your business, become a stakeholder, be honest & forthright, capable of managing your expectations, engaging & negotiating with buyers to achieve the best outcome, most of all to allow you to continue to run your business with the minimum of distraction.
What gives me the right to make these comments? What I have described is my own personal experience.
In addition, you still need the collective back up, knowledge, experience & reputation of a Business Brokerage.
Business Partnership is one of the UK’s leading business broker, with almost 40 years experience.
In the business world, completion can have a variety of meanings. In project financing, for example, completion is when the cash flow of the project becomes the primary source of repayment on loans. Prior to completion, a turnkey contractor or business loan might be used to cover costs.
However, when buying or selling a business, completion is roughly equivalent to the same term in property purchase.
Completion is the last stage of a business purchase. In much the same way as buying a house, buying a business goes through a number of stages. These, broadly, are – negotiation, agreement, exchange of contracts, and completion. The last is the point at which the deal is closed, and the balance of money changes hands according to the terms of the contract.
Prior to completion, the seller can continue running the business any way they like, unless they’ve signed an agreement that states otherwise. From an operational point of view, before completion, the business belongs to the seller. After completion, it belongs to the buyer.
If you’re selling your business, think about the implications of this. Any long-term commitments you enter into could make the business less attractive to a buyer who wishes to pursue a different strategy. The right decisions though might increase its attractiveness.
A business sale begins once both buyer and seller are satisfied with the contract terms. For the buyer, the searches would not have revealed any problems and all buildings and assets would have been checked and met with their approval. Any outstanding obligations such as gaining planning permission will have been undertaken by the seller, and the necessary funds secured.
There will then, usually, be a Heads of Agreement document that, though not legally binding, is an important step in the process. This brings the key elements of the sale into a single document, and also acts as a timetable for the remaining stages of the purchase process.
Now the buyer can carry out their own due diligence to analyse the business accounts, practices and day-to-day operations. Once this is completed to the buyer’s satisfaction, the Sale and Purchase Agreement will be signed, which outlines both parties’ obligations in the process.
All that remains is for payments to be made. Once this is undertaken in full, or to the extent outlined previously, the deal can be completed.
Completion is the point at which the company passes to the control of the buyer. This brings a range of new obligations, particularly with regard to land, trademarks, and patents. Registration details need to be changed, and contracts and insurance amended. The buyer will need to inform the business rates department, the Land Registry, and other statutory bodies.
Buying a business is a complicated process and you’ll usually need assistance. At Business Partnership, we have thirty years’ experience helping people buy and sell businesses. Get in touch with us today, and see how we can help you.
This blog is to encourage all those that have ever dreamt of running their own business to pursue their dream. It may not always be a walk in the park, but it’s likely to be the best decision you ever make!
Here at Business Partnership, we’re passionate about entrepreneurship and we love to help people reach their potential and follow their dreams by connecting people who long to be their own boss with the ideal business for sale.
For many people, running their own business has always seemed like an ideal that is just out of reach; and whilst we’re not going to say it’s easy, what we will say is that all the hard work is well worth it.
“If you just work on stuff that you like and you’re passionate about, you don’t have to have a master plan with how things will play out.” – Mark Zuckerberg.
If you’re thinking about running your own business then it makes sense to choose a business or industry that you’re passionate about. Choose something you love and waking up for work each morning will be a pleasure.
When you’re running your own business you get the final say on all important business decisions. For the entrepreneurial-type, being in control and making key decisions can be the key to feeling challenged and fulfilled at work.
As touched on in the previous point, running your own business can be extremely fulfilling. You will feel a sense of achievement like no other in seeing a business grow and flourish based on the decisions you have made and the hard work that you’ve put in.
When you’re calling the shots it gives you the flexibility to build a business that will fit in with your lifestyle and commitments. Build a business with your work/life balance in mind to live a happier and healthier life where not only are you fulfilled at work, but you also get to spend more of your time on what’s important to you, whether that’s your family, dog or hobby.
When you’re the boss your personality will form the foundation of your company’s culture. When working for others it can be difficult sometimes to fit in with someone else’s vision and personality type, but when it’s your own business you are in control of your work environment and the people you employ.
Of course not every business venture is a success, but with the right prior research, a bit of know-how and a lot of hard work, you could find yourself with an earning potential much higher than you ever did working as an employee for someone else.
Feeling inspired to become your own boss? Get in touch with us here at Business Partnership for expert advice on buying a business. or browse the businesses for sale on our website.
Many people grow up dreaming of owning their own business and believing that being their own boss will lead to a better life, but this isn’t always the case. Most entrepreneurs in recent years have been venturing into acquiring businesses rather than starting one from scratch in hopes that it will lower the risk. However, the issue they face is that they are blinded by this idea of a decreased risk to reward ratio and therefore forget some of the pitfalls of buying a business in the short and long term. Here we help you understand some of the main drawbacks of purchasing a business so if this is something you are considering exploring, you are in possession of the facts.
Unlike with creating a start-up where the financial investments tend to be more gradual, with buying a business you will need to invest a substantial amount of money up front. There are a lot of costs that you may not have previously considered such as fees from business transfer agents, solicitors, accountants, advisors, surveyors etc.
Depending on the business you are acquiring you may find that you need to invest money on top of what you paid. Often you may see that a business has been neglected and feel that a small cash investment will increase its chance of success but this figure could potentially be a lot more than you initially thought. It is important to be completely realistic as to what investments need to be made and how much you are willing to put in before making a final decision.
In most cases vendors are happy to stay on with the business and transition with the new owner but this isn’t always the case. You can’t assume that they will be willing to honour agreements they made with the previous owner or automatically renew contracts. This is something you will have to consider and renegotiate.
You must always bear in mind that the owner is selling the business for a reason and whilst they may tell you it is due to age, wanting more time with family etc. there is the possibility they are abandoning a sinking ship. In any case you must thoroughly look into every aspect of the business to see where it is at and what its future looks like.
Creating a start-up means you hand pick your staff yourself but when acquiring a business you are taking on staff that are already a team and are familiar with the previous owner. They may not be happy that they are getting a new boss and this could potentially damage morale and efficiency of the business. It is important to gauge the feeling before making any decisions as the people are what make a business.
Whilst the business may appear to be doing fine, the current owner may be aware that the industry as a whole is not doing so well. If it looks like the situation isn’t going to improve this may be a reason for them to leave. It is important to look not just at the business but the sector as a whole to get an accurate feel for your future.
If you are considering purchasing a business it is importune that you have the right advice in every aspect of the purchase. This means you will need business transfer agents, consultants, solicitors, accountants, not just the advice of those closest to you. With the correct team you should be confident that you are making the correct decision for your entrepreneurial future.
In recent years entrepreneurs have increasingly come to see the numerous benefits of purchasing a preexisting business as opposed to creating a startup. It can make the overall process a lot quicker and easier, but that is not to suggest that you won’t need to put in time and effort to find a business that is right for you. An organised approach is required to help you find and acquire a business and therefore it is important for you to consider the following 8 steps.
Delving into the world of purchasing a business without properly understanding the direction you want to go in is never good. In most cases when individuals aren’t confident in what they want to do and what is involved they will turn to professional help, in this case usually in the form of business brokers. These professionals specialise in this area will be able to offer invaluable advice throughout the entire process from finding a business that is right for you to aiding the negotiation, valuation and closing the deal.
If you have followed the previous step, at this point you are likely to know which sector you are interested in. It is important from here to now consider this sector in more detail to help you understand what is involved in owning a business in this area and what you can expect. With the help of an advisor you should be exploring several potential businesses and understanding when the best time to buy would be. Towards the end of this process you should be able to create a list of two to three businesses that you are interested in and wish to further explore.
At this stage is important to pause and consider why you are buying a business. From this write down your top 10 goals. e.g. what income do you need, what role do you want, where is the business located, which sector etc. Your business broker should help with this and guide you to ensure that you never lose sight of these key objectives.
Viewing a business is never a set process as whilst some owners are open about their intentions to sell, others may not want their staff and/or customers to know of their plans. Because of this it is important that you are discreet when visiting and are mindful of their situation. Despite this you must ensure that you, and your advisors, are as thorough as possible when asking questions to confirm what the business is worth to you. Again your chosen business broker should be your ally in ensuring a consistent approach in comparing the business you are considering. The key areas you should be looking into will be the financial history of the business, its current performance and why it is being sold and any legal issues the business may currently be tied up in. However always remember that you are buying the future, so seek financial projections, understand how these are put together. Why do customers buy, is future income contracted and what happens when the owner leaves? There are 8 key areas to consider and a systematic approach is important to understand the future potential of the business and the risks that exist. If possible you may also want to speak to the customers. It is important to note that you should be discreet and mindful when doing so as both may be reluctant to be honest because of ties they have with the current owner.
If you do not already have finances available to you for this new business venture then you will have to build a relationship with a lender. In most cases lenders will be interested in the following;
If you have used a business broker throughput this process they will be the one to facilitate making an offer on your behalf. If however you have not used this service and you are making your own offer over the phone it is important that you follow this up in writing. This can either be in the form of a letter or an email but in either should be titled ‘subject to contract’. Be clear at this point, state how much will be paid, when it will be paid and any terms and conditions. It is easier to get difficult terms included at this stage, when a vendor is looking at how much you are offering.
During this period between making an offer and confirming your sale you are likely to be involved in a series of negotiations with the current owner. It is important that you have your broker leading your accountant and lawyer and to verify all of the information provided by the vendor and help you to negotiate agreements that work within your best interest. This may include having a period where they are still present to help make the hand over transition smoother and arranging your own independent survey of the property to ensure everything is in order.
Once you have reached an agreement it is important to note that the deal is not done until all conditions of the sale have been met. This will include a transfer of finances, the lease, VAT registration, contracts, licenses and the verification of all financial statements. This is often called due diligence and will uncover some unexpected matters, ensure these are assessed commercially and dealt with, if needed, in the contract.
Finally, just before you sign, recheck the deal against the goals you set earlier in the process. If the deal does not deliver any of these, ensure you understand why and that you are happy with that reason, before you sign. This will ensure you buy the business you wanted to have.
Everyone wants to be their own boss; living life on their own terms, choosing their own hours and pursuing a career they love. The obvious route to this for most people is to start their own business but as with anything in life this comes with a number of benefits as well as drawbacks. Starting your own business requires a lot of time, money and planning that can take years to organise. However, you research could well reveal that in terms of the risk to reward ratio, purchasing a pre-existing business is often a much better option. It is estimated that on average in the UK the survival rate of start-up businesses after one year is at 91% but after five years only 4 in 10 remain. This lack of sustainability is just one of the many reasons why entrepreneurs are now considering acquiring an existing business. Here we discuss 5 of the best reasons as to why you should buy a business over creating a start-up.
As with any investment, becoming your own boss whether it be through a start-up or acquiring a business comes with its own risk. It is about weighing up the pros and cons in doing so but as we have seen, when buying a business a lot of the drawbacks and risk that come with a start-up are dramatically decreased.
As anyone who’s ever done it will be able to tell you, starting a business is one of the most rewarding things you can ever do. The rush of energy as you start trading and the sense of satisfaction as the orders begin to come in. What feeling is there better than the one you get when all your hard work has paid off and your own creation flourishes?
It’s much like bringing up a child. The hard work and sleepless nights as you nurture it through helplessness. The enormous sense of joy as it takes its first faltering steps, then delight as it becomes self-supporting. Having that urge to start it all again is understandable.
It’s not unusual for those of us building our own businesses to achieve that sought-after success, then find the adrenaline rush suddenly disappears. It all becomes a little bit mundane doesn’t it? And then into your mind pops another idea.
Got to Keep Moving
Having another great business proposal that you want to work on need not detract from the business you’ve already started. There are lots of people out there who want to run their own business, to be their own boss with a secure income, but who don’t have the means or the drive to start by themselves.
So why not sell your business on as a going concern? Let someone else take the reins of your creation, freeing up time and capital for you to get that new venture off the ground. It’s a win-win situation.
Find out more about selling your business, or get a valuation and start the ball rolling, by contacting Business Partnership today. You too can be that serial entrepreneur who leaves a trail of successful businesses to benefit your community, whilst keeping your creative side flourishing.
It’s the season when we want to make changes in our lives. New Year has gone, and we’re back to the boring paper pushing for ungrateful managers. It’s been driving you mad for ages, but now you’re at the beginning of another year and you’re not getting any younger. Where did it all go wrong?
Break Free
Sometimes you just want to throw in the towel, tell the boss what you really think and work for yourself. You’ve always dreamed of your own business, but it’s such a hassle. All that setting up, market research and building a client base. Yet the mortgage won’t pay for itself, so you can’t take the risk.
Why Take the Risk?
You can have it all. No really you can! Have you never thought about stepping into a successful ready-made business? At Business Partnership we specialise in matching up established businesses that are being sold, with talented and enthusiastic buyers. People like you.
Let Someone Else Get You Started
That’s right. Cut out all that worry and stress. Some people thrive on it; others don’t. In fact, some people love it so much that they set up a business, get it running effectively, and then want to do something different. That’s when they decide to sell it. Alternatively, they may have been running it for ages, and simply want to retire. Or something else, like a change in family circumstances. There are many reasons why good, established businesses are put up for sale. That’s why we’re here.
Don’t Delay
If you want to do it, do it now. Think of the feeling as you leave the office for the last time, knowing that from Monday you’ll be your own boss. Wonderful isn’t it?
Tempted to buy a business? Visit our website and find out what you could be doing this time next year.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.