Friday, March 21, 2014

What You Should Look for When Buying a Business

According to Forbes, if you're planning on buying a business, one of the most important things to consider is net cash flow. "It’s like taking the pulse of a firm’s financial health," they explain. It's easy to evaluate businesses on surface level profit, yet this can conceal both unexpected booms, as well as future problems. A business could show a $500,000 yearly profit, yet a major client failed to renew their contract two months ago, which would only show up in an evaluation of net cash flow.
Are you thinking about buying an existing business? Buying a business can be a safer investment than a start-up by itself. If the company is established, you know they have a decent business plan, an existing customer base, the necessary equipment and supplies in place, and potentially a better chance at surviving and being profitable. However, it's not a 0% risk opportunity. Here are several tips so that you know what to look for when buying a business.

Make Sure You're Not Buying Their Debt
What to look for when buying a florida business

  • When it comes to a business sale, you technically want to buy the assets, not the business stocks. If they owe money, you won't assume liability by buying assets. Your tax basis will also be better.
  • Make sure to ask about payroll and sales taxes. Many states will come to you for owed taxes or payroll even if you've bought assets. The business owner should be current on their payments, and the state tax authority can issue a clearance letter for your assurance, as well.
Look for a Good Deal, Not Just an Easy Buy
  • Many industry experts have predicted that there will be many business investment opportunities over the next few years, as baby boomers retire and look to sell. One way to make sure the business isn't on the way out, too, is to talk to others in a similar industry or market. This will give you an idea of whether the market is still strong enough for this company, and help you make sure there aren't other reasons for selling it right now.
  • Don't rush into a decision. If you can't do the due diligence before it "has" to be bought, let the opportunity pass, because there's likely a dark lining to it that you're not seeing yet.
Buying Businesses You Understand, is Ideal

If possible, your best bet is to invest in a field you have some prior experience in. This will help you more accurately gauge the business's current worth, and it will make taking over the company easier. For people uninitiated to industries, there is a steep learning curve.
Are you thinking about investing in a business? Let us know in the comments.

Tuesday, March 11, 2014

Buying a Florida Business for Sale: Top 3 Things to Consider

There are many things to consider when buying a Florida business but no matter if you have been a business owner for years or are just breaking free from a corporate life, taking certain steps and making some decisions prior to getting started will make the business acquisition process all that much easier. Sure a Buyer will have to assess their financial situation and look at how much money they have to put down, as well as what their living requirements will be, but successful entrepreneurs that are ready to take action tend to take their planning to the next level.

Determine Location

For many entrepreneurs buying a business in Florida is an American or even International dream, they have the money to make it happen but some fail to realize just how big Florida is.  With over 800 miles and a 12 hour drive, from one end of the state to the other, finding the right Florida business for sale becomes near impossible because there is too much physical ground to cover. It is not only the distance but the cultural, economic and style of living can vary drastically in various parts of Florida. It is important for a buyer to take these things into consideration before they start randomly searching for Florida businesses for sale. Doing a little homework and narrowing the geographical territory of the business search will greatly improve the effectiveness of the search. Many times proximity of family and friends, or accessibility to international flights may play a role when it comes to selecting an exact location for buying a Florida business.

Match Your Interest

It is important for Buyers to do some internal soul searching. The Business Brokers at Truforte Business Group like to refer to this as identifying your true forte or strength. It is always easier if a Buyer is focused on a particular industry or area of expertise. That could mean management, creativity, logistics, organizational skills or any number of things. It is not only about industry but in most cases there needs to be an internal reason to buy a Florida business. For the Buyer who just wants to buy “a good one” the day may never come for that Buyer will not know a good Florida business for sale even when he does find it. Examining the individual internal motivations can be one of the keys to successful business acquisition or divestiture.

 Contact a Florida Business Broker

Contacting a Florida Business Broker can be one of the most important things to consider as a Business Broker is capable of directing a buyer to a vast amount opportunity and assisting them with obtaining confidential business for sale information. Without the involvement of a Business Broker in many cases it would be near impossible for a buyer to obtain the information necessary for them to make an informed decision about buying a Florida business.
Once a Buyer has considered the necessary steps and determined that owning a Florida Business is for them contacting the Business Brokers at Truforte Business Group will immediately give them access to thousands of Florida Businesses for sale through both the Business Brokers of Florida and the Alliance of Florida Business Broker associations.