Posted on May 11, 2009 in Business Law
Although most entrepreneurs dream of starting their own business, your best option in Washington, DC may be to buy an existing business. If you purchase an established enterprise, you have access to a recognized name, an existing customer base, more accessible financing options and an immediate revenue stream. Just make sure that the business you select has a positive reputation, a solid financial base and the potential to reach a fair purchase price.
If you decide to buy an existing business, it’s important to enlist the assistance of a Washington DC business attorney familiar with all aspects of business law and related transactions. Buying a business could be the most expensive decision of your life. You, your Washington DC business law firm and your financial advisor are a team.
When purchasing a business, here are a few important areas to evaluate during your initial assessment and subsequent due diligence investigation:
Find a business that suits your personality and skills and is available at a fair price. Once you’ve narrowed down the type of business you want, start looking close to home—convenience in location will be a benefit. Ask friends and colleagues if they know of any businesses for sale—sometimes the best opportunities surface through word of mouth.
Line up your financial resources. If you find a business you want to buy, you want to be able to move ahead with an offer.
Determine why the current owner is selling. This could raise a red flag or encourage you to look into the business further.
Determine what is required for licenses and permits, zoning observances, and environmental obligations.
Carefully study the company’s financial status. Ask the current owner for copies of the company’s last three years of financial statements and tax returns. Find out what types of loans are outstanding.
Find out if the current owner is willing to stay and work with you through a transition period. Talk to employees to find out what they think about the business and its potential. If current managers and employees aren’t aware of a possible sale, find out why.
Investigate product quality and customer service standards. Make it a point to interview current and previous customers.
Ask suppliers about the quality of their relationship with the current company’s owner and if they’re paid on time.
Check into employee turnover; it’s generally a sign of how the business is run and the strength of its reputation in the community.
Take a close look at the physical structure, equipment, furnishings and cleanliness of the business. Would you want to work there?
Buying a business is a complex process, but it can be rewarding as well, if you find the right business and carefully work through the necessary operational, legal and personnel issues with the help of a trusted business attorney.
This information is provided by the Washington, DC law office of business attorney Michael Trevelline, 1823 Jefferson Place, NW, Washington DC 20035, www.mjtlegal.com.If you decide to buy an existing business, it’s important to enlist the assistance of a Washington DC business attorney familiar with all aspects of business law and related transactions. Buying a business could be the most expensive decision of your life. You, your Washington DC business law firm and your financial advisor are a team.