01 Apr Around the Web: A Week in Summary
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A recent article from Forbes entitled “The Importance Of Asking The Right Question Before Buying A Business” offers advice for buyers when considering a business to purchase. With the right questions, it can become easy to decide if it’s the right purchase for you.
15 questions that a buyer may want to ask a seller include:
- Why did you get into the business in the first place, and what excited you about it?
- What is your day-to-day role in the company?
- What would happen if you took 30 days off from the company without any advance warning to the employees?
- Why does your customer buy from you rather than your competitors?
- How long have your employees been with you, and why do they stay?
- What is wrong with the business and needs time and attention to fix or improve?
- How much working capital do I need, and how did you determine the amount?
- What concerns do you have about the future of the industry?
- What mistakes have you made, and how can I avoid them?
- Do your financials reflect all your income and expenses, or is there any off-the-books money I need to be aware of?
- What are your biggest challenges right now?
- If you can’t sell the business, what will you do?
- What systems, processes and procedures are documented within the business?
- What would your growth plan be if instead of selling the company, your goal was to double it in five years?
- What does your customer base look like?
A recent article from Harvard Business Review entitled “How to Make Selling Your Business a Fulfilling Experience” discusses what business owners can do to make the sale of their business a happy occurrence. The author shares three lessons learned from conversations with a variety of business owners.
The first lesson is to identify your purpose. What do you enjoy doing? What do you wish you could do? This will help you find direction after the sale.
The second lesson is to work on your business, not in your business. This means removing yourself from the day-to-day operations (aka delegate) and focusing on strategic moves to help the business grow.
The third lesson is to plan for a sale far in advance, even if you don’t intend to sell. This keeps you focused and helps your business become stronger, while also setting you up for success if you do decide to sell at some point.
A recent article from Inc. entitled “3 Reasons You Should Buy a Business Now” explains why it is currently an opportune time to purchase a business. Timing is an important factor for a successful purchase, so being able to identify when the time is right to strike is valuable.
Buyers might want to consider buying now because:
- Baby Boomers are seeking retirement which means more businesses are on the market and prices may be more buyer-friendly.
- Financing is available with recent changes to the SBA 7(a) and 504 loan programs which have made it more affordable for buyers.
- The economy is getting ready to rebound as vaccinations increase and states open back up.