7 Steps You Should Take When Considering Buying a Business: Get auditing reports on at least the last 2+years. You need to make sure the firm is financially stable, which means that the profits outnumber the expenses and since you can’t trust anyone these days you should hire an auditor to do it for you.
Consider how you can monetize the firm better than the previous owner. Think about what the previous owner has been doing wrong, how can you fix his mistakes and make a better profit then what he used to make.
Calculate how long it will take you to make your initial investment back. Many people make a big mistake with buying business thinking that they will make you money on the first few days, even with purchasing a current business you will need to give it some time for the profits to start rolling in.
Study the reputation and credibility of the firm you are buying, if the previous owner/employer made a bad reputation for his business then you will surely want to stay away from anything related to his firm. People tend to stay away from businesses with bad rep even after they are sold/traded
Make sure the current customers will stick with the business after the purchase; losing the current customers could potentially destroy the firm financially as they will be the only ones you have during the first term. I am not telling you to go around asking the customers if they will leave the firm but what you should do is make check if they are satisfied enough to stay and try out your services.
Find ways to fund the purchase. Look for a bank that is ready to give you a loan in order to purchase the business; if you can’t find any you might consider looking for funds from investors/friends that are interested. Obviously you will need to take into account the interest ratio and make sure that you paying the appropriate percentage.
Check if the business is worth the value you are paying for it. Many business owners over-estimate the value of their firm, you will probably be flashed by descriptions that will turn out to be useless after the purchase; tons of people get ripped off at this stage and eventually fail to make up for their lost money.
By Ismail Elrehayel For more information on how to start and manage your own business visit us on our Dubai Business News [http://www.dubaibusinesslounge.com] website