Take Care With Buying A New Business
For many among us, the desire to own and operate a business to be your own boss is a cherished vision and a driving force.
A time comes when skills that have been learned through education and job training and honed over years of experience provide the wherewithal to operate a business in your own right.
At that point, there is the choice to establish a new business or to acquire an existing business with the benefits it offers of an established customer base, strong relationships with suppliers, established operational systems, and experienced staff.
While it is in buoyant economic times that businesses flourish, recessionary times such as the present generally present outstanding buying opportunities as existing enterprises may be acquired cheaply and with the benefit of upside in the near future.
At such times, a business may be placed on the market for any of a number of reasons.
The owner may simply be ready to retire.
Other owner-operators who had been planning to work a few more years may choose to sell the business and move into retirement earlier.
In some cases, people with a sound business may be carrying debt that is serviceable in the good times but which becomes a serious burden at a time of economic downturn.
They may choose to sell rather than face pressure from financiers and run the risk of having an administrator or receiver appointed to the business.
Also, a business may have come under the control of an administrator or receiver who has placed it on the market to recoup funds and retire debt.
While most people selling a business are honest about what they have to offer, there is always the risk that claims will be misleading.
As a buyer, you must be cautious and it always helps to insist that representations made by the seller, or agents acting on their behalf, be put in writing, and that the veracity of statements and claims is checked thoroughly.