Mcmurry & Swift, a leading Washington State Business Broker serving Puget Sound and western Washington

Buying an Established Business

ADVANTAGES:

Currently operating and established, existing cash flow, financial continuity, possible owner financing, seller training for smooth transition

DISADVANTAGES:

Substantial investment, possible transfer risk, purchasing intangible as well as tangible assets

Here are some items you might want to check when considering the purchase of a business:

  • How long has the business been established?
  • How long has the present owner had the business?
  • Why is the present owner selling?
  • Do the books and records indicate a history of success?
  • Is there enough monthly cash flow to make the monthly financing payments or debt service?
  • And enough to pay a reasonable salary to you, the new owner-manager?
  • And some left over to provide a fair return on assets and your cash investment?
  • Does this business provide the lifestyle quality you seek?
  • ? Are the business fixtures and equipment state of art and well maintained or are you going to have replacement expenses?
  • How much competition is there in the local market and regional markets?
  • Is the industry in which the business operates declining or growing?
  • Does this business require special licenses or qualifications?
  • Do you have experience managing people?
  • If the property is leased, is the lease assumable?  Are there options to renew?
  • How difficult will it be to find qualified employees?

If the business is clearly successful and making good money, you can expect to pay a top price for it because it includes the intangible factor called 'goodwill'. If the business is a 'fixer upper', or has not yet achieved its potential, or is undercapitalized or poorly managed or needs additional exposure to the community, you might find a real bargain. For the energetic individual who thrives on a challenge, this is the best buy.

Reasons for buying a business | Starting your own business
Buying an established business | Buying a franchise  | Buyer Groups

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