Purchasing a business is a huge deal - a decision that should not be taken lightly.
Although buying a business can be an exciting proposition, it should be handled carefully and thoroughly to avoid buyer's remorse.
Here are a few do's and don'ts when it comes to purchasing a business:
- Research the business thoroughly. Understand its appeal--what makes people return? Why? Would you be a good fit for the establishment?
- Be honest with yourself. Make sure the business you are considering lines up with your strengths. Determine if your values fit with the business model. If you aren't comfortable as a people person, buying a small sales company may not be the best fit.
- Align your interests. Being a business owner requires passion and dedication. Ask yourself "can I do this every day for the next 10 to 20 years?" If the thought makes you cringe, perhaps consider another option.
- Be courteous to the previous owner. Owners struggle to let go, especially when it's something they've poured years of energy into. Try to be understanding when you are working with the seller, and understand it's a difficult process.
- Forget to budget for all costs. Purchasing a business comes with a host of transactions, including licensing, insurance and titles. These add up quickly.
- Rush the process. Excitement can lead to impatience. You've pinpointed the perfect opportunity, and the buyer has accepted your offer. Now is the time to demonstrate patience as everything slowly transitions. Stay calm and don't get frustrated if there are setbacks. There will be setbacks.
- Assume everything is up to code. Make sure you have an inspector determine what is and isn't acceptable when you are looking at a business. Try to obtain all inspection, maintenance and repair records for the building(s) associated with your business.
- Try to do it alone. It's best to have a team helping you find and purchase a business. Your team should include a broker, an accountant and an attorney. Having a team means you will ensure everything is official and set up accurately. You may think you'll save money by forgoing help, but it could end up costing more in the end.
These are just a few things to take into consideration when you are looking to buy a business in Virginia. Make sure you examine all your options thoroughly to determine the best fit for you.
If you are considering purchasing a business, contact a business transaction attorney to help the process go right the first time.