When it comes to the decision to buy a business, there are many factors to consider.
Not only do you need to choose the correct type of industry suitable for your needs, but you also need to understand the value in any business you may wish to buy.
To buy a business at the right price is paramount as the entry price will likely determine any future capital gains potential you may realise at a later date when you eventually exit. If you buy a business well, manage it intensively and add value, there is every chance you will realise a capital gain when you finally sell the business.
However, if you buy a business and pay too much, then you will find yourself asking an unrealisable amount for the business when it comes time to sell the business. This is an understandable human emotion to recover all the purchase costs and ancillary costs in your asking price, but buyers of businesses are not interested in “what you need” to sell, they themselves are interested only in buying the business at a fair or favourable price themselves. Therefore there is little point in telling your business broker what you need to sell, he can only get you what the market will pay.
The solution is to have the business you are considering buying valued before you buy it. When you buy a business, you need a professional Business Broker on your team. Their business appraisal will assist you in your negotiations with the seller, assist you with finance and minimise your entry risk.
GMO can help you buy a business the right way. They can give you a proposal on examining several potential purchases and give their opinion on the risk factors of several industries, so you start the process of buying a business on the right foot.
Contact Graham O’Hehir, GMO’s Managing Director today, and discuss your options. Graham will direct your unique situation to the most suitable Business Broker, who will be your guide the rest of the way.