Things to Consider before Buying a Business

buying a business, business law, tips, Naperville Business LawyerIn the modern commercial world, businesses are regularly being purchased, sold, and merged. Even more frequent are the discussions about purchasing interests of a particular company. For example, just this week rumors emerged once again regarding Google’s interest in buying social media icon Twitter. While financial experts will endlessly debate the advantages and disadvantages of such a move, a far greater number of businesses are bought and sold with much less fanfare. Many individuals are simply looking for a good opportunity and it sometimes may be found in an existing business available for sale. When considering buying a business, I encourage my clients to be as objective as possible to ensure the best possibility for success.

Business and financial professionals recommend a thorough assessment of any potential business purchase. In the most basic terms, such as assessment can be done by answering several simple questions:

Why is the Business for Sale?

An available company is on the market for a reason. Potential buyers must be acutely aware of the current owner’s motivation to sell. It may be possible that the owner is ready to move on, or needs the liquid assets a sale can provide. However, it may also be possible that owner knows or surmises that the outlook for the future of the business is not positive.

How Will the Business Remain Competitive?

This question is generally addressed by first understanding the nature of the company’s industry and market. Awareness of regulations and potential impacts to profitability or competition can help make a decision regarding the purchase. It is also vital to recognize the reasons that prospective clients and customers will choose this business over competitors. If the advantage over other companies is not clear to a potential buyer, it may not be clear to customers.

How Can the Business Be Improved?

It is unlikely that an owner would be selling a business for less than full market value without hints of impending trouble. Therefore, in order for the acquisition to be profitable, the buyer must be able to increase the company’s value in some manner. Improvements may include streamlining business processes or reducing costs, or the addition of marketing capabilities that can increase the customer base and revenues.

Where to Find Professional Legal Advice?

Buying a company can create great opportunities for profit and growth, but the wrong purchase can be financially devastating. An experienced Naperville business lawyer can help. If you are considering buying a business, contact the Gierach Law Firm today to schedule a consultation. Our qualified team will work with you to conduct the necessary research and determine if the purchase represents the best option for your business future.