Advice. How to buy a ready-made business

If you want to run a business, sometimes it's easier to buy a ready-made one than to organize a new one from the very beginning. A ready-made and functioning company has some advantages compared to starting a new company from scratch. But buying a small business, even with all its advantages, is not exactly easy to make. There are a ton of things you need to know before you buy franchise rights or any existing company.

When buying a small business, the first thing you need to decide is the type of company you would like to own. It is not wise to invest in something without the certainty that it will give you more than your investment. Main question The question you need to ask yourself is what kind of business should you invest in?

In your selection process, narrow down your options to a type of business that you are very familiar with. Suitable choice is a business corresponding to your profession. You can also choose something that you enjoy doing as a hobby, for example. In both cases, the more important factor is the need for you to have extensive knowledge about the type of activity you choose. This knowledge will play an important role in business management.

Once you have chosen a business that suits you, find out the reasons why the owner decided to sell it. If this was related to the results of the work, then carefully analyze all the risks that you will have to face. Can you bring the company to a more viable level? In the case of franchising, there is no need to worry about this, but be that as it may, before taking any step towards buying a company, it is necessary to carefully study the viability of the target market, the feasibility of choosing a location and analyze the financial condition of the business.

Another issue to consider when buying a small business is financing. You need to answer a simple question: can you afford it? Getting a loan may not be difficult for you, but still, why buy more than you can afford? It's like wondering if you should take out a loan for an amount that you can't repay on your own.

Buying a small business is no easy task. If the company is already operating, then you need to find out about all lawsuits, tax liabilities and debts that the company has, as all this will pass to you, as the new legal owner. On the other hand, if you decide to purchase franchise rights, you need to know everything about the need for royalties, franchise fees and other financial obligations, as well as the timing of these payments. Try to find out also about any hidden fees. Sometimes, maintaining franchise rights requires you to make more payments than you owe.

Stages of buying a business.

1. Research the company or franchise agreement.

The contract of sale or franchising must comply with established rules and conditions in accordance with the laws and regulations of the municipal government. Do not buy a company without first checking the documentation. Consult with the appropriate experts, especially a lawyer, on the most basic points of the contract.

2. Bargain.

If you think you can bring the company's asking price down a bit, try it. However, if you do not know how to conduct such negotiations, enlist your mediator to help. Saving a little here and there can help you win big in the end.

3. Make a payment.

If you have the necessary funding, then you just need to apply payment order and pay the cost in accordance with the agreed schedule. Loans for the purchase of companies can be obtained from the bank. It would be nice if you could talk to the bank while looking for a suitable company, so as to speed up the whole process.

4. Sign all required papers.

After you have made the payment and reached an agreement, both parties must complete the transaction by signing all the necessary papers. They need to be assembled accordingly, as they will be needed in the next step. It's best to have a lawyer around during the signing process to make sure everything is properly documented and you haven't missed anything.

5. Register a company under your name.

At the moment when you have received full rights to the company, you need to register all necessary changes with the appropriate authority. If you want to change the name, transfer ownership and renew the license, then this is the time to do it.

What you need to know when buying ready business? Is it worth choosing this option for those who start in the field of entrepreneurship, or is it better to abandon such an idea and create your own company from scratch on your own? For those who have never been in business, many experts recommend an already established, promising and successfully operating business "Full construction". This will allow you to learn from own mistakes but on a successful, revenue-generating and profitable model. Of course, this does not completely insure against mistakes, but a well-coordinated team will help to stay afloat and level out, smooth out all the flaws of inept management on the ground with their coordinated actions. initial stage.

What you need to know when buying a ready-made business

There are several options for purchasing it:

1. The sale of his business by a businessman who decided to change his occupation, move abroad, or for some other reason “retire business”. Advantages of such an offer: it is usually the cheapest, since the seller most often wants to sell the enterprise in short time. Located in the same city where he lives (works) potential buyer, which means that it is possible to obtain complete and reliable information about the company's affairs, its reputation, difficulties and relations with the law. But sometimes such a firm is sold at the stage of the onset of problems, and this can lead to failure, additional investments, even bankruptcy. Investments in the acquisition of such a project range from 10 thousand rubles. Choosing this option, you should choose a type of activity similar to the profession, the interests of the new owner, in which he has experience, knowledge or a desire to thoroughly understand.
2. Turnkey business implementation from companies that do this professionally. This is beneficial from the point of view of a preliminary market analysis. That is, such a business is initially created in promising, demanded industries. In addition, all legal, accounting issues of the initial stage have been successfully resolved here, which means that you can safely start a business in the literal sense "with clean slate". The cost of the project starts from 50 thousand rubles. As in the previous version, it is advisable to analyze your abilities and knowledge, since there will no longer be assistants in business at the development stage (at least free ones).
3. Franchising. Unlike previous types of ready-made business, franchisees are ready to support their partners at all stages of their activities. Since responsibility for the result is part of the reputation of the entire network. In addition to assistance, financial, business, industrial, a franchise is:
   • search and selection of suitable premises;
   • consulting or actual selection of equipment;
   • supply of goods and products for the implementation of the case.

Ready business: Water delivery service

The downside is the price. Even the most inexpensive franchises will require significant initial costs (rubles / months):

• Franchise "Orange Elephant" - 295,000/3;
• Franchise "SpecTech" - rental of specialized machines and tools - 60,000/1;
• Franchise "Lawyer 24" - legal support - 198,000/1;
• Franchise "Space plastic sand" - toys - 150,000/2;
• Franchise "Chocolate Dream" - holiday services - 200,000/3.

In addition to making the right choice, when buying a ready-made business, you should be prepared for the need to go through all legal procedures and processes. This is the registration of a company, registration with the Federal Tax Service and insurance, pension funds, statistical authorities. You also need to organize and maintain tax, and if you register as an LLC, then accounting.

Pitfalls when buying a ready-made business

For the first two options, these are hidden debts, the possible need to restore the reputation, the positive image of the company and assess the prospects of activities. In the absence of valuation practice, analytical skills and experience, it is recommended to contact specialists. For example, in audit companies. Auditing can be performed not only financial side business, but also other equally important and essential aspects of it:

• ecological;
• industrial;
• labor relations and discipline;
• legal and legal guarantees and problems.

Franchising carries the risk of bankruptcy. Although most franchise agreements involve a regular assessment of the performance of a new franchisee, it is difficult to calculate your strengths and skills at the initial stage. Or you will have to constantly seek help, which in some cases is associated with additional costs and payments.

Nowadays, there are two options for starting a business. Classic - that is, starting a business from scratch, coming up with an idea, drawing up a business plan, accumulating initial capital, registering, etc. There is a second option, much less problematic - to acquire a business. The second option with buying a case saves time, nerves and effort. There is no need to “reinvent the wheel”, the organization is already in place, there is also a job profile, recruited staff, a place in the entrepreneurial market, a client base, well-established relationships with suppliers or business colleagues, i.e. The firm is operating and making money.

But in this case, there are difficulties - and who, in fact, will sell you a ready-made and successful business, or at least accept you as a share? Moreover, your logic works in the following direction: if the seller sells his successful business to you, then not everything is clean and there is a catch. Moreover, a successful business requires a good economic education, work experience, and special training. After all, even a small company in terms of turnover of funds can turn out to be a very complex organization with its own specifics of work, attitudes in the team, etc., i.e. with its pitfalls, which are not visible at first glance and become apparent only when you get in the know and the business is bought.

Therefore, before acquiring a business, you yourself must learn one truth: do not buy a pig in a poke, but buy a business that is close to your occupation.

The easiest option for buying a business is to buy a business online. This is easier than acquiring a "classic" company. It is enough to buy a franchise that allows you to run your business under a popular brand.

One of the main questions that a buyer of a business asks himself is what prompted the previous owner to sell his business, what is the reason for this. If you are sure that the sale is not related to commercial activities the company you are buying - due to illness, family circumstances, then consider yourself lucky. Because the commercial profitability of the company is the main condition for its purchase. The firm may have undisclosed debts, complex and damaged relationships with suppliers, outstanding loans, problems with tax office, formidable complications in the market. Those. the company may turn out to be with a damaged reputation or associated with criminals, which will put a heavy burden on your shoulders.

Immediately you need to decide: what funds are you willing to give for the purchase. Please note that after the purchase, most likely, you will have to make additional investments. And also calculate the cost of a finished business, i.e. his net income.

Another nuance is the prospects of the purchased enterprise. For example, you need to understand that in the area in which the company operates, there may be another competitive company that may well force you out of the market. There is one more subtlety: it is quite possible that in the age of scientific and technological progress there will be new technology, which will make your business either unprofitable, or even unnecessary.

When all the details of the case are clarified and the conditions suit you, you can buy this ready-made business. The most simple thing is to advertise in the press - “I will buy a business”, or, on the contrary, look at the ads “I will sell a business”. But it is best to contact special companies involved in the sale of business organizations. Then you will be insured against the pitfalls that have already been mentioned above. In addition, reputable entrepreneurs want to make such transactions without advertising them in advance - confidentially.

Nowadays, people want to invest their money. Let it be small money, but if they are invested wisely, they will bring their income. Buying a ready-made business should be approached very responsibly. Therefore, our article will tell you how to buy a ready-made business. We will also tell you what you need to know in such a case. In addition, we will give an algorithm of your possible actions when buying a ready-made business.

Evaluation of the pros and cons of a ready-made business

Decide on funds

First you need to decide how much money from your budget you are willing to spend on buying a new business. Next, decide how much money you can borrow or borrow from a bank. You should also study all aspects of liquidity and real estate both in you and in the business you are acquiring.

What you need to know when buying a ready-made business: Choose options that are suitable for the cost

If you want to find the answer to the question of what you need to know when buying a ready-made business, then you have come to the right place. After all, it is in our article that you can see the best recommendations.

Businessmen who want to sell their business place advertisements on the Internet, newspapers, etc. It is worth remembering that not all sellers of a business announce their sale “publicly”. Usually the reason is that they want to maintain confidentiality so as not to cause disturbance among suppliers, employees and customers. That is why it is also very important to make inquiries about selling a business among friends, colleagues, lawyers and consultants.

Find out the reasons for selling the business

The seller may have several of them:

• inability to control and manage the process due to a change of residence;
• all sorts of disagreements between the owners;
• loss of interest in own business. Sometimes this happens if a previously favorite activity ceases to bring pleasure and satisfaction;
• the previous owner does not have a worthy successor, and the age is already old;
• the owner wants to invest his funds in a more profitable project.

All of the above reasons can be combined in the following way:

1. The business has ceased to bring good profits (the company may be in danger of bankruptcy).
2. The owner wants to start another business, lack of funds for further development companies, there are personal motives for which a businessman should retire.
3. When buying a company, it is advisable to be guided by the second point. But the choice is still yours.

Estimate the rest of the business

It is impossible to estimate the value of a company only on the basis of the value of shares in the market. That is why it is worth evaluating small and medium business in three ways:

income approach. In this approach, the price of a company will be determined by the income that is expected from it. The buyer will never pay more for the business than it can bring in for the period of interest to the buyer. Using this option, the buyer calculates several options for business development, but still the risk is very high. If the company's income is good and stable, then this method can be applied without fear of going bankrupt.

Market approach. The value of a business can be determined by comparing the sales of companies over a short recent period of time. The characteristics of the company, both qualitative and quantitative, should be approximately equal.

Cost approach. This approach is most effective when the buyer compares the cost of buying a business with the cost of starting the exact same business.

It is up to you to decide which approach to choose, because there is no unambiguous answer which one is better. All yours further actions will depend on what kind of company you want to acquire. You should also pay attention to the fact that contacting consultants at this stage will only help you better understand this matter.

Study your chosen business in great detail

If your funds allow you to contact specialists, then you should do it immediately. The specialist will check the seller for "good faith", as well as shed light on the information provided by the seller. Checks the correctness of all documents, etc. If you have no particular doubts about the purchase, and the purchase and sale amount is small, then you can try to do all the verification procedures yourself. It is worth paying attention to the fact that if the seller hides or conceals any information, this is the first danger signal. The following points will be quite serious reasons for concern:

• Very little time to buy a business;
• Some information on the object is missing;
• It is difficult to obtain any information on the purchased business;
• There is no confidence in the reason for the sale of the object or the reason is unclear;
• The seller misrepresents or misinterprets information.

Minimize your risks

1. You need to make inquiries about anything that could harm the business.
2. Find out the condition of the property, location.
3. Never take a word. Rely only on facts.
4. Suggest that the seller draw up a guarantee that the business has no debts that do not pass through the accounting records.
5. Contact a lawyer to draft detailed plan transfer of all powers.
6. In the contract of sale, it is necessary to indicate that only those shares that are directly related to the activities of the enterprise are transferred to you. The debts of the past owner of the enterprise do not pass to the current one.

Start buying negotiations

If all questions have been discussed and doubts have dissipated, then we can proceed to negotiations.

We draw your attention to the fact that the seller may ask for a deposit, because no one wants to deal with a frivolous buyer. You will decide in advance on the price and terms on which you are ready to purchase the business. Each of you will bargain, do not be afraid and do not give up everything that you have already achieved. You will definitely come to a result that will suit both. After all, that's what bargaining is all about.