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Buying a small business

On Behalf of | Aug 24, 2021 | Business Law |

Each year in Oregon, many people start new businesses. Others choose to purchase existing businesses so that they can operate their own companies without having to start from scratch. However, purchasing an existing business requires multiple steps to prevent things from going awry. Here is an overview of what to do when you want to purchase a business.

Finding a business to buy

Before you decide to purchase a business, you should first think about what type of business you want to buy. You should focus on businesses in an area in which you are passionate. It is also smart to choose a business in an area in which you have experience. Once you have decided on the type of business, you will need to look for businesses that fit your interests that are listed for sale. You can also work with a business broker to identify potential opportunities and for help with screening out failing companies.

Once you have identified a potential business, make sure that you know why the owner decided to sell it. Evaluate the company’s financials, assets, and debts. Working with an accountant to analyze the business’s financials can help you determine whether or not to move forward with a purchase. You will need to analyze the business’s asking price before you secure capital to move forward with the purchase. Finally, check the applicable business laws to determine any licensing, zoning, and other relevant issues that might impact the business you are considering.

Purchasing an existing business can be a good way for people to start their journeys as entrepreneurs. However, prospective buyers must conduct due diligence before making a purchasing decision. Without a careful analysis of a potential business’s financials, a buyer might end up with a business that is failing or does not have growth potential.