03 Nov Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Inc. entitled “Looking to Sell Your Business? There’s a New Class of MBAs Looking to Buy” discusses how recent MBA grad school graduates are looking to buy existing businesses and turn them into their own.
More and more recent MBA graduates are seeking out entrepreneurship through acquisition (ETA). In an effort to drive growth, these prospective entrepreneurs are interested in acquiring small companies and modernize a number of procedures using simple technology.
A new approach and set of skills could be beneficial for many prosperous companies with annual revenues over $1 million, as they already have their business model figured out and face significantly less systemic risk.
Additionally, according to Columbia Business School Professor of Professional Practice Angela Lee, sellers should invest the time necessary to thoroughly investigate potential buyers. It is imperative to speak with others who have collaborated with the potential successor, regardless of the prospective buyer’s experience. “Think of it like a job interview, but instead of speaking to one or two references, speak to a minimum of 15,” she advises.
A recent article from Nav.com entitled “A Complete Guide To Buying An Existing Business In 2023” discusses the many things to consider to ensure a successful purchase of an existing business in 2023.
Buying an established business is a big decision for one to make. There are many things to consider before you do so to make sure you’re ready for success. A potential higher purchase price and the need to handle any potential issues already present are drawbacks of purchasing an existing company, but advantages include gaining access to a broad customer base and an operational plan.
Knowing that there are several pros and cons to consider as mentioned above, there are also several legal things to consider as well.
Consider the following due diligence and legal aspects:
- Contracts and agreements
- Intellectual property
- Assets and liabilities
- Business structure
- Registration and licensing
- Tax obligations
- Data privacy and security
A recent article from VRBusinessBrokers entitled “Important Elements a Buyer Needs to Consider in a Business Sale” discusses the four elements any buyer should keep in mind when buying an existing business.
Buying a business is a significant financial and strategic decision that requires careful consideration. Whether you’re a seasoned entrepreneur looking to expand your portfolio or a first-time business buyer, there are crucial elements you need to take into account when evaluating a potential business acquisition. Consider the following elements:
- Review the industry
- Examine profit margins
- Determine whether the business is tightly operated
- Cash flow and discretionary costs
By considering the above elements, you can make an informed and successful business purchase as a result. It’s essential to also work with experienced professionals, such as lawyers and accountants, to guide you through the process and ensure that all important elements are addressed. With the right approach and careful consideration, you can increase your chances of a successful business acquisition.