Buying a business is one of the most important decisions that an individual will make during their entire life.
And most likely, the purchase of a business would be larger than a purchase of a home, which most people view as the biggest investment they will need to make.
Buying a business can be as easy as providing the financing needed to procure the business. Unfortunately, many unqualified, not ready, inexperienced buyers go into the buyer pool and buy businesses without really knowing what they are buying or really looking at.
Fortunately, there are many M&A firms that can assist buyers. Businesses can range anywhere from a million-dollar business, that a corporate executive type buyer might purchase all the way up to a $100 million manufacturing company that may prefer to grow through acquisition.
Both individuals and corporations would have the opportunity to have an M&A advisor be on their side Unlike, buying a home, buying a business has no true comparables.
Example of this would be when shopping for a home, you have similar houses in the neighborhood that you can compare square footage, how many bedrooms and bathrooms etc. However, when buying a business there could be over a thousand different decisions point needed to determine the value or to determine viability or continued viability of that business.
Most Important, make sure you understand what the living breathing organism is of that business.
Smaller businesses can be more tied to the seller. These entrepreneurs can wear several hats, such as CFO, HR, Sales, Marketing etc. These people can never be replaced by an inexperienced buyer. Imperative that buyers know what the infrastructure is and continuity is included in the business.
The Vant Group is here to help guide you through the steps of buying or selling a business.
Here’s a great article on buying a business we would love to share.