Whether you’re buying your first business to start the next phase of your life or you are buying to help expand into a new industry or geographic location, purchasing an existing company can be less risky and more affordable than starting one from scratch. It may cost you more upfront, but when you acquire a business it comes with intangible benefits that simply are not available to startups such as brand recognition, existing marketing, clients, trained employees and third-party relationships.
Buying an existing business increases your chances of success. Statistics show that between 30 and 35 per cent of new businesses in Canada fail. However, more than 95 per cent of businesses that survive five years will ultimately be successful.
Buying a Business Can Give You Significant Advantages:
- A properly developed business plan and proven business model
- Brand recognition with an established customer base and reputation
- Immediate cash flow and therefore an immediate return on your investment
- Real operating results, as opposed to projected results
- Established credit history along with vendor relationships
- An employee base that’s been trained
- Efficient operating systems, licenses and permits
The Stakes Are High – Target the Right Business
From restaurants to retail businesses, manufacturing to wholesalers, small to medium sized businesses with good cash flows are selling for record-breaking prices, yet buyers are lining up to buy because of the benefits listed above. Given the high stakes involved, before making an acquisition, you need to thoroughly weigh your goals, risk tolerance, market opportunities, and assess the best size and type of business for you.
Before deciding to buy a business, you should evaluate the following:
- Can you see yourself in the business?
- What you can afford?
- Will the seller provide financing?
- Will you have enough operating capital after the down payment?
- Is there a sound financial foundation?
- Can you see ways to create value?
- What are the opportunities and threats?
- What kind of reputation does the business have?
- Does the physical location work for the customers, suppliers, and you?
- Are there any assets such as a building, equipment, or inventory?
- Is the website profitable?
- Do all of the products or services generate revenue?
- Are sales on the rise, flat, or decreasing?
- Is there any intellectual property (for example, patents and trade-marks)?
- Does the business have good relationships with its suppliers and financing partners?
- Do employees tend to stick around?
- Diversified customers or reliance on a few
- Risk of sole source supplies or are there multiple suppliers?
- And many other matters to be addressed
There is no perfect business, however some fit better than others. The key is to find the right “opportunity” that is perfect for you. SB Mergers and Acquisitions will help you identify the best target that suits your specific goals and objectives, whether that’s solid sales and profits, or good bones and high potential.
Securing the Right Price and Terms
Buying the right business also means paying a fair price. This gives you the ability to build something with real value that has the potential to be resold later for a profit.
Taking all of the above into consideration, you can count on our experienced M&A team to help you understand the real value in the different businesses you look at, ensuring the business you buy is priced at a realistic market value of the assets and liabilities and true earning potential.
In most cases, SB M&A should be able to help you secure vendor take back financing for a percentage of the purchase price. This loan provides you lower risk, better terms and a greater commitment from the seller to ensure your success. In addition, we’ll also work with you to secure additional funding for your business purchase.
SB Mergers & Acquisitions – experience you can count on
After all is said and done, you’re looking to buy a business with the ability to produce cash.
We want to help. SB Mergers & Acquisitions has the experience to assist you in every aspect of the business transaction. Acting as your trusted intermediary we’ll ensure a smooth transition into your new business venture.
Take control of your own destiny with informed risk and high rewards.
Interested in buying a business? Start the process. Contact us now
Find the right business under the right terms and conditions.
Schedule a private and confidential discussion with a SB M&A intermediary. It’s free of charge, and it may supply you with information that could make or even save you a fortune.