Currently I seem to be helping people plan out their business futures. I have a good number of people regularly asking me if I can help them look at a new business they want to buy. It’s an awesome responsibility assisting potential buyers. Some buyers are very cautious and some are perhaps, almost over-keen.
Some of the key early questions that need to be asked include:
- Is the buyer actually capable of being self-employed? (which is quite different to working on a regular salary)
- Why is the vendor selling?
- Is there a good track record of acceptable past profitability?
- How much of the past business success is down to the owner’s personal influence (ie will the business drop off under new ownership?)
Once we get through the above questions and a few others, we get down into the numbers in a lot of detail. We employ good processes and tools to help us.
We can point out the upsides and the downsides but in the end the decision to purchase is not ours, but rests with the client. It’s an awesome responsibility and a privilege.