Buying a business is more often than not, an attractive proposition compared to building an organisation from scratch. There is much less risk, especially if staff, equipment, suppliers and customers are all in place, giving you the opportunity to enjoy the benefits and rewards of business ownership from day one.

Also, apart from potential problems to do with “culture”, acquisitions are usually a much quicker way to achieve growth, rather than by growing the business “organically”.

Of course, there are still many risks and responsibilities, and you will need to possess entrepreneurial spirit, motivation and determination to manage and improve your new business. You will also need to ensure that you evaluate all the available businesses for sale in order to choose the best business to suit your experience and long term objectives.

When buying a business, many businesses for sale provide a reasonable amount of information, with an Information Memorandum (IM) document, once a Non-Disclosure Agreement (NDA) has been put in place. This should help enable you to have a greater understanding of what is being sold with some good background information, together with some key financial figures.

The IM should therefore, enable you decide whether or not it will be worthwhile taking matters a stage further by asking for copies of the accounts or even setting up an initial meeting with the Vendor.

Please note however, in some cases, there maybe a few questions that will need to be answered before a Vendor will provide you with any information at all. This is quite normal, particularly for well established, profitable businesses, where the business owner(s) will want to make sure that no one is going to waste their time!

Vendors will often want to understand your industry associations prior to progressing matters and may request a brief explanation regarding the basis of your interest and your circumstances.

In particular, they may want to know if your interest is as an individual, group of individuals or on behalf of an organisation and may want to see copies of the CV’s of the individuals involved. They may also want to know if you or your organisation have made any acquisitions in the past and will want to know what your funding sources are.
 
Buyers need to be prepared in buying a business, just as Vendors need to be prepared in selling a business!

For further help and advice, please contact us!