Thursday, January 16, 2014

Three Important Steps for Buying a Florida Business

Did you know that, according to BizBuySell, about 50% of Americans would like to own their own business if it were possible? People buy businesses because they represent investment opportunities. It's often easier to buy into an existing, successful business model than it is to build one from scratch. Florida is one state where market growth is great for businesses. If you are thinking of buying a business in Florida, you probably have several questions about how to proceed. Here are three important steps to buying a business.

1. What to Look for When Buying a Business When buying a business, it obviously helps to have experience in the industry itself. Pick a company that you will be able to evaluate with a professional eye. Do research on your potential business before making an offer. You should ask to see a list of all the equipment they own, any debt they have, details concerning any contracts needed, and past financial statements. This will help you determine whether the acquisition is the right investment for you.

2. Know What You're Going to Buy There are two ways of buying businesses. You can either buy them in entirety/assets(the business itself, and all stocks in the business), or in stocks. When you buy assets, you are basically buying everything. This includes everything from computers to vendor lists. Buying the stocks of a company means no title transference is necessary, which simplifies much of the buying process. Stock purchases can be riskier, though. How you buy the business will affect how much in taxes you end up paying.

3. Negotiate a Good Deal You might be surprised to learn that is usually room for negotiation in business acquisitions. In many cases, owners are tired of what they're doing and just want the business off their hands and into the hands of someone who will continue its success. Initially making an offer at 80% of the asking price is not out of the ordinary. If the Seller declines, a buyer can usually come back with a more on-par offer. Asking for more equipment and office supplies to be thrown into the price if they aren't already included maybe another option.

 What do you think are important steps to buying a business? Let us know in the comments.