What To Look For When Buying A Business
Written by: Patrick Findaro
Last Updated by
Rocío Torres: August 15, 2022
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You want to buy a business, but you are not sure where to begin? You may have entrepreneurial pursuits in mind. But you also want to mitigate risks by having a set structure in place. Buying a franchise or business for sale can offer you that support and structure you need. At the same time still being a business owner. While you can explore many of the businesses and franchises listed on Vetted Biz, the next step is to narrow your business search based on what factors you are looking for. It is advantageous to work with business brokers that understand the buying and selling process of a business.
Are you interested in the business?
One of the most important aspects to consider is your personal interest in the business itself. This could be based on your past experiences and passions. Many times, potential business owners are interested in owning a restaurant, or a business in the food and beverage industry because the most visible franchises and small businesses are in this space. Even if it is a business that has strong financials, it needs to be a business you would enjoy running. And operating day to day. It is also important to consider if your lifestyle will align with the business.
Are you looking for a business that allows you to work from home, or fit your schedule?
If I buy this business, will it continue to be profitable?
One of the most important points to review in a financial statement of a business is the gross sales. Going through the gross sales of a business’s financials will help you understand the type of profits the business can generate. Business owners generally make nearly 10 to 20 percent of the business’s total gross sales. Note that trained accountants perform the financials of most businesses that will be used to legally minimize tax. Therefore, you should not be afraid of negative numbers. Most of the businesses on Vetted Biz show earnings, sales, and other important financial points.
How do you plan to execute your business purchase?
As mentioned earlier, it is ideal to observe what the current owner of the business is doing, what they have done in the past, and any feedback they can provide. It is also advised that potential business owners should seek consulting from business brokers, based on their experience with similar businesses. Once you understand how the business owner operates their business, apply those practices to your own lifestyle, and make sure it aligns with what you are looking for in a business.
