There are numerous reasons for buying a business, one of which being to create and manage your own wealth. We at Piedmont M&A Advisors recognize that the true impact of business ownership goes beyond the bottom line.
This article unpacks some of the most important considerations for you when buying a business. Because business ownership is a significant move, you will want to narrow your search toward seeking opportunities that align with your personality and financial goals. Practical, personal, and financial considerations help create the foundation of successful business ownership.
What kind of business do you wish to own? Are you seeking to pursue an industry that aligns with your values and core interests? Do you relate to your customers, staff, as well as your current and prospective vendors? It is important to maintain and build, as well as identify, with each member of your staff in their present and proposed functional responsibilities as you move forward with a purchase.
Your satisfaction and success will hinge upon your capabilities to thrive in the particular business culture in which you choose to engage. For example, if you have a particular allergy to air quality and certain scents, purchasing a wholesale beauty products business is probably not an optimal choice. Your business should naturally align with your personality and in accordance with the type of environment in which you would prefer to work.
Do you enjoy where you live? If so, you should probably prioritize buying a local business. Or, at the very least, spend some time contemplating if you would be willing to lead a business elsewhere. This thought process becomes even more important when you are buying a business that has multiple locations. Considerations include whether this business is located within 2-3 hours of driving time from your home.
Why is This Business for Sale?
As a knowledgeable investor, the first question that may come to mind is: Why is this business for sale?
Understanding why a business is for sale provides critical context that can help one make an informed decision and negotiate a purchase. There is no reason to be wary of the buying and selling process involved with buying a business. The owner may want to retire, may be in poor health, or is going through a “business divorce” with their partner. There are a multitude of reasons why a business owner intends to sell their business.
Piedmont M&A Advisors bring the insight that helps focus your reasons to purchase a business. Among many, these include:
- SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
- Historical, current situation, and forecasted performance data
- Industry insights
- Competitive analysis
Barriers to Entry
How do you intend to pay for the business? Most business owners pay with a combination of their cash, owner financing, and bank loans, and must create a business plan to shows that they can afford the loan. Do you have access to the right data to complete your business plan? Are special skills and knowledge required to compete within the industry?
Get the Right Insight
When it comes to buying a business, there is much to contemplate. It is wise to work with an experienced mergers and acquisitions advisor for assistance and guidance.
Let Us Share Successes
At Piedmont M&A, we have provided consultation to countless buyers. Our approach ensures that both your financial parameters and personal interests are satisfied. We assist with every stage of the process, from valuing the business to leading the purchase process. Please reach out to us and begin a conversation with one of our seasoned advisors.
In the meantime, you may also be interested in:
- The Cost of Selling a Business
- Identify Your Personal Transaction Goals
- Know How Your Business Compares to its Competitors
If you would like to understand the process of buying a business, please do not hesitate to contact us at 404.719.4792. We look forward to helping you achieve your M&A goals.