What You Need to Prepare for When Buying an Existing Business for Sale

Buying an existing business for sale has its own set of advantages and disadvantages. Jumping into the idea of buying an existing business may not be for everyone, but it pays to know within yourself if you are cut out for it or not by having preparations done.

Planning starts by knowing the industry the existing business you want to buy belongs in. For instance, the possible industries an existing business for sale may belong to can be the following:

• Building and Construction
• Defense
• Design
• Food and Beverage
• Information and Communication
• Manufacturing
• Professional Services
• Financial Services
• Retail
• Science, Technology and Innovation
• Transportation and Logistics

Once you categorize the business according to the industry it belongs to, get to know the specific information about that industry such as statistics, average performances, grants and other benchmarks that will let you know how much you can earn from buying an existing business or how much it will cost you for the business turnover.

If you are looking for existing businesses for sale, search according to industry so you don’t waste your time looking at industry listings that do not interest you at all.

Next, you have to know whether you can buy an existing business you want based on your current resources. If you are buying a business in a certain place and you need financing, research on banks in that place that can provide you with different loaning options that will complement best your current financial state. As you research on banks, it is also best to research on financial management such as tax basics and obligations to prepare you for what's ahead.

Think about whether buying an existing business for sale is a good move for you or not by listing the advantages and disadvantages of engaging in one. See the table below for a preliminary list.

Advantages	Disadvantages
The business is already in operation	You still need to learn the rhythm of the business; you cannot dictate how it should be operated
Your focus is continuing the business and not establishing it from the ground up	Need to replace old equipment, stocks and tools, which are expensive
Benefit from the goodwill associated with the business you are buying	The business may have a bad image, which can be challenging to change
You keep the customers, suppliers, staff, equipment, stocks and contacts	Customers, suppliers, staff and contacts may leave knowing that the owner is different

There are several questions too that you can ask yourself whether buying an existing business is right for you or not.

“Why do you want to buy an existing business?” “What are your motivations for doing so?” “What industry do you want to a buy a business in?” “Do you have the resources to buy one?”

It is also important to ask yourself why the business owner is selling his business. For a business buyer, such as yourself, you need to know whether there is a future in that business or not. There is no point investing in it if there are no returns that you can calculate and anticipate should it be turned over to you.