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Tips for Buying a Business

By: Peter Watson
Total views: 1651
Word Count: 599
Date: Tue, 7 Feb 2012 Time: 2:10 PM

Buying a business represents a very challenging task. You may or may not already possess the knowledge to find the right deal.

But, it's okay if you don't! Not everyone does, and when you use the help and resources of others, you end up with a better result.

If you're still looking to locate deals, tap into your social network. Mention to everyone you know - friends, family, and networking contacts - that you are looking to buy a company.

Enlist Professional Help When Buying a Small Business

Most people who purchase companies feel like they could have received a better deal if they had more help. Don't do the same when buying a small business and end up in a similar position!

Brokers, lawyers, and accountants can help you find the right deal and get the best deal.

But, don't just pick out the first person you find. Instead, have conversations with multiple people. See who you trust and who seems to be working in your best interests.

Just any old team of professionals can be equally as disastrous as having no professionals. Assembling the right team will maximize your chances for success.

Be Careful When Buying a Business in Australia

A word of caution when buying a business in Australia: stay in an industry you already know.

Unless you have a solid financial foundation already in place, stick with something you know. Working outside of your knowledge increases the chances your new purchase will fail.

If you purchase a company outside of your specialty, it will simply take longer for it to start running. If you are ready for a risk, then go for it.

But, most people aren't. And if you're one of those people not in a good financial place, stick with what you have experience in.

Additionally, it may be wise for you to do your due diligence. Some potential purchasers will thoroughly scrutinize all liabilities. Others will work in the business to get a better feel.

Finally, you'll also want to learn why the company is being sold. If the owner just started the company recently, it may be a deal to pass up.

Worse yet, perhaps the owner isn't telling you exactly why he or she is interested in selling a business. The organization may be below break-even, and even worse, it could be operating at a major loss.

If you're not a strong negotiator, you can hire an intermediary to do the job for you. He'll make a lowball offer and will be able to defend it. If the owner really wants to sell, you just might walk away with the deal of a lifetime!

The Process of Selling a Business is the Same

When selling your company, simply follow the same process you did for purchasing one. By following wise, time-tested principles such as this, you'll put yourself in position for success.

And imagine the great feeling you have when you know you've made the right purchase!

Network Your Way to Success When Buying a Business

Talk to as many people as you can, and use professional help if needed. A professional can help spread the word you are looking to make a deal, and before you know it you'll be buying a business!

About the Company

Business Trader is an online network that connects business owners with business buyers across Australia.

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