One of the strategies that people are using during the recession to increase their business is buying the competition. There are many reasons people sell their business. But here are the three reasons they usually want to sell.
The first one is: The company is losing money. They want out; yet getting as much as they can for their business.
The second reason is: Someone wants to retire. Take their profits and move to Florida, Arizona or some other warm destination!
The third reason is: Someone has died and the family has no interest in taking over the business.
When purchasing a business you need to be really careful in what you are buying. Usually there is something that you are unaware of that could cause you big problems down the road. Buying a business in many ways is like forming a relationship. If a man or a woman was walking down the street and they had a great physical appearance, seemed rather intelligent and their personality was off the chart, would you ask them to marry you? (If you were single, of coarse.) You could very well have a relationship based on all of the wrong reasons and although this person looked absolutely terrific they would cause you nothing but grief and you’d regret ever having said “hello”.
When making an acquisition of a business go slow. Ask a thousand questions. Make sure you have a great attorney and an excellent CPA. You might also want to look for a business advisor to ask all the right questions to make sure your acquisition is a fit with your business goals.
The approach I would suggest that everyone takes when buying a business is trying to find out what’s right with the business but more importantly, what’s wrong with the business. Turn over every rock you can find (symbolically, of coarse) to find out what’s under that rock.
Before moving forward with buying a business, do your homework. Get help from the right professionals. Ask lots of questions. Then ask more questions. And if you still decide to buy, you may have a winner and a stronger position within your industry or marketplace.