Buying a small to mid-sized business in South Carolina can be a complicated process. After the sale is final, you, the owner, actually have to run the business you just invested in. There are many different factors relating to buying an established company that you must consider. While being your own boss can be very rewarding, entrepreneurship can certainly be challenging, so it important that you have a clear, and thorough understanding of the business you’re interested in buying.
There are many different questions you should ask yourself, the seller, and your business broker during the selling process, but we want to give you just 5 to start with that will really get you thinking about the complexity of decision making associated with being a business owner.
1. Is it the right time?
The thought of owning your own business can be exciting. When you own a business you will work harder than you have ever worked before, especially soon after the transfer of ownership because you will be learning and growing with the company as time goes on. If you have a significant amount of time to invest in running your own operation this is certainly the right time for you!
2. How much working capital do you have access to?
Even if cash flow of the business you’re buying is positive, you need to have access to other capital in the event that the business incurs unexpected expenses, or if there are significant changes in revenue.
3. How much is the current owner taking in salary?
If the current owner’s salary is lower than the salary you’re accustomed to living off of, you’d have to either take a pay cut, or develop other income streams to generate more income for the business. This is a very important question to ask that most people don’t consider.
4. What do you want owning a business to do for you?
This is something you should be thinking about before you even start searching for business that are for sale. Are you looking for a career change? Are you looking to find something to occupy your time because you’re retiring? Are already a business owner, and looking to add another company to your investment portfolio? Knowing what you want to get out of buying a business will help you determine what type of business or industry would best suit your needs.
5. Why is the owner selling that business?
Many business owners sell just because they are ready to retire. Whatever the case, find out why the owner is selling, where they’re headed next, and ask if they’re willing to provide you with training after the sale.
Make sure you have the answers to these questions before buying a business. If you have questions about buying a business, feel free to reach out to us. One of our agents would be happy to speak with you!