Are you considering the exciting opportunity of buying a business? Taking the leap into entrepreneurship is a thrilling and potentially rewarding venture. Whether you’re a seasoned entrepreneur or a passionate individual looking to make your mark in the business world, the prospect of buying a business presents a myriad of advantages and opportunities.
Buying a business is a life-changing opportunity. It’s a chance to try your hand at something you’ve always dreamed of doing. Or, for those of you who are looking to expand an already existing business, it’s a chance to reach more people than ever before.
However great the reward, it is also important to acknowledge that buying a business is not without its challenges and risks. Conducting thorough due diligence, seeking professional advice and carefully evaluating the business’s financials, market conditions and growth potential are critical steps in the decision making process.
Buying a business is a monumental decision – you shouldn’t make it without first consulting those close to you and other professionals. With the help of Lincoln professionals and the amazing community, get ready to embark on a path that could lead to new horizons and a prosperous future as a business owner.
Costs of Buying and Operating a Business
Buying an existing business typically involves more upfront cost, but it also presents less risk than starting a business from scratch. Financially, you’re looking at actual profit/loss records and have a clear history of sales to assess. Interpreting such information can be tricky, though, and you should always consult a professional. Cruise & Associates (cruise-associates.com) can assist with properly interpreting financial documents and help guide you to determine the full costs of purchasing and operating the business.
If you are about to buy a business, you’ll want to know exactly why the business is up for sale. To help determine if the business will be successful under your ownership, carefully review all documents pertaining to the business and the transaction including the letter of intent, confidentiality agreements, contracts and leases, financial statements, tax returns and sales agreement. Learn as much as you can about the business’ successes, failures, challenges and future opportunities.
“Understanding the process is the key in making sure you are making the best business decision and not setting yourself up to fail,” advised Robert Cruise. “Once a purchase price is reached, you need to make sure you understand the written agreement before you sign. Don’t leave any ambiguities that could cause trouble at closing or even after the sale has gone through.”
Choosing to buy an existing business is a valuable entrepreneurial accomplishment that will impact your life for years to come. With the right connections and a lot of hard work, you can be the perfect person to turn a good business buying opportunity into a great future. Cruise & Associates hopes to be by your side to assist with and witness it.
Physical Advertising Options
What has the business you want to purchase done for advertising in the past? Did it work? What could be done better? Though advertising isn’t a priority when making the decision to buy a business, it should be considered all the same so you are prepared to attract business once you are the owner.
One form of advertising that many don’t think of in today’s technology-based society is signs. Work with the team at Sign Pro (signprolincoln.com) to invest in signs, banners and vehicle graphics that’ll catch the eye of every passerby. Signage contributes more to the success of a business than you think. Eight in 10 consumers enter a store or business they have never visited before based simply on its signs, while 60% of people claim that the absence of signs deters them from entering a store or business. Just think about all the business you could have with amazing signs!
Sign Pro has a variety of signage solutions to fit any project or budget. They offer interior and exterior signs as well as yard signs to help you best advertise your new business. Additionally, you can purchase banners, flags and vehicle graphics that spread the word wherever you travel! Regardless of which route you want to go with when advertising your new business, Sign Pro can help you find successful promotion.
Practice Due Diligence
One of the biggest considerations when buying a business is understanding what is driving success in the existing business and what the risks are to this success continuing once you are the owner. Because it is easy to overlook key details, hiring a professional to help is highly advised. One that comes highly recommended is Lutz (lutz.us).
Lutz focuses on the readiness of the existing business, which significantly impacts the buying process. The more time and energy spent by the existing owner to limit the risks of their business reduces the time and money spent during due diligence for both parties. There is no perfect list for due diligence since every business deal is unique. Therefore, they tailor the due diligence process toward the greatest risks, which could be risks to an over-involved owner, employees, suppliers, customers, competitors or technology.
Most of the time, taking an existing owner out of a business will have a negative impact. The goal of the due diligence process is to quantify this potential risk so you can get comfortable with the purchase price and terms of the deal. However, sometimes this tends to be overlooked because the buyer does not inquire enough about the roles and responsibilities of the existing owner. Lutz can help ensure potential risks such as this are taken into account.
According to Consulting Director Ryan McGregor, “The more familiar the buyer is with the existing business or industry, the less likely the buyer will have major surprises after the purchase or buyer’s remorse. They will have an idea of how the company truly makes money and will probably have ideas on how they can grow the business.”
Place Extra Emphasis on Receivables
When buying a business, it cannot be stressed enough to do a thorough evaluation of the business you are interested in purchasing. One of the most important aspects of a business to factor into your buying decision is the company’s receivables.
It’s important for potential business purchasers to understand that not all of the billings a business sends out are going to be paid. Don’t leave your budget so tight that nonpayment results in the business going under. It’s good to know about receivables up-front to create a policy for handling those cases of nonpayment. AR Solutions (arsolutionsinc.com) is happy to consult with clients to help them set up their receivables process in a way that increases their in-house collections to prevent future issues.
As a collection agency, AR Solutions will work closely with you to determine the reason for any nonpayment of receivables and estimate what you can expect to receive from each instance. If you’ve owned a business before, AR Solutions can track and collect on receivables for you, so you can focus on what your business does to make money – and you don’t pay AR Solutions unless they collect the debt.
“We will act as an extension of your new company and conduct direct communication with your clients,” said Founder Aaron Newell. “Our competitive fees are also contingent upon collection, so you do not pay unless we collect.”
In this generation, a successful business depends on the technology powering it. If your network is slow, your production will be slow. Without a strong foundation that meets all of your needs, IT can be the downfall of a great business idea. Before you buy a business, consider the cost of the tech equipment and software you will need to purchase. Yost Network Solutions (yostnetsolutions.com), a locally owned and operated technology firm, is available for tech consultation and implementation that can help your new business succeed.
Yost believes in a proactive support model – they want to reduce your system management and support costs by helping to prevent problems before they happen. They will build and keep your systems running at their optimum level to ensure you have time to focus on other aspects of your business. Scheduled maintenance plans, active system monitoring and good diagnostics are the key to fully optimized systems.
Yost Network Solutions provides IT solutions that are designed with you in mind. They will work with you to determine your business needs and find areas where technology can make your work even better. They will work with you to determine your needs and ensure your new network can handle the workload. From increasing your internet speed to implementing system automation and creating a data monitoring system, Yost is sure to be able to improve your network.
Unbiased Tax Professionals
Buying a business is an emotional, overwhelming decision. It can be difficult to cover all your bases when you feel pressure to make all the right decisions for your future. As such, it is important to have a team of trusted advisors who know the right questions to ask and that will provide an objective opinion. The professionals at SP Group, P.C. (spgrouppc.com) are the type of trusted advisors you want on your side.
A trusted tax professional can provide unbiased guidance in a multitude of areas, including the valuation of the business, the best structure for the transaction and the potential tax consequences of the sale. When evaluating a potential business purchase, it is easy to overlook overall fit from a cultural and process standpoint. A decision that looks good on paper in the short-term may have a negative impact on the culture and efficiency of your business in the long run.
“It is imperative to start the process of every business purchase by defining what the entrepreneur’s long-term goals are, and then outlining the steps necessary to accomplish those goals,” said Austin Zimmerman, CPA. “The most interesting aspect of buying a business is almost certainly the variety – no two transactions are the same.”
When considering the purchase of a business for the first time, remember that there is really no such thing as too much due diligence. SP Group encourages you to communicate early and often with those involved in the buying process to ensure the process goes as smoothly as possible.
Protection from Cyber Threats
When buying a business, it is easy to overlook some of the details pertaining to how it will be fully functioning after you own it. Most people consider the financial and current operational standing of the business, but not so much the smaller details such as cyber security. Buyers, we suggest you speak with Darren Lichty, owner of Panology Tech Solutions (panologyinc.com), before you close the deal.
“You never want to partner with an IT expert who just tells you what box to click,” Darren warned. “You need to find a partner who is willing to answer questions and educate you from the perspective of your own business, not from the perspective of someone trying to hit a sales quota. To learn about anything in the technology industry, you need partners who will tell you not just what to buy, but why.”
Just like with every other aspect of buying a business, you need to research the tech company you hire. Even though outsourcing is a great opportunity to save some money, a common problem in the online security world is people who believe whatever the IT person tells them to do and end up paying for systems they don’t need. Worried about a scam? Hire someone you can trust: Panology Tech Solutions.
Panology is a tech company devoted to the development of small- and medium-sized businesses. They utilize Cylance, a software that detects current threats and issues in technology better than the traditional antivirus products. With CylancePROTECT, Panology is able to improve the security of your business with a unique artificial intelligence (AI) approach that predicts and protects against known and unknown malware, fileless attacks and zero-day payload execution.
Consider Financial Sustainability
For a lot of businesses, employee costs seem to be one of the largest, if not the largest, cost of doing business. If wanting to retain employees, an employer has to consider wages and benefits to do just that. In most cases, they have to find a payroll provider that can provide reliable services at a fair and reasonable cost. At TAC Payroll Solutions (tacpayrollsolutions.com), they will take some of the responsibilities off your plate at an affordable rate so you don’t end up with higher costs than your services.
“It’s always my goal that the employer has confidence in me so they know what to expect in fees for the service I provide,” said Owner Terry Clark. “I also provide information about payroll, payroll taxes and benefit costs so they can move onto other decisions that influence their buying process.”
If you’re considering buying an established business, you need to have complete disclosure of all current and comparative financial reports and tax returns for the business. If possible, compare to another business similar to the one being considered. Then take all financial statements and tax returns to their CPA or accountant to review and listen to their feedback. They want you to be successful too, and have a lot of experience with these situations.
Digital Advertising for Your New Business
In a mostly digital society, advertising and promotion has shifted towards screens in the form of short videos and eye-catching graphics. While creating these yourself is better than having nothing posted online, you might be surprised at the difference in response between the ones you create and the ones professionals design.
As a business owner, you understand your business and vision better than anyone else. That makes it easy to not trust a professional to bring your ideas to life. But, Altitude Motion Media (altitudemotion.com) is a business that specializes in making scroll-stopping videos that are what you want them to be. They are professionals you really can trust with your advertising goals.
“Our company is unique because we are a small, family-owned business, so we understand running a business,” shared Founder Ryan Lindbeck. “When it comes to our videos, we can operate quickly and still provide very high quality content. We love being creative and helping other businesses tell their story. We want people to know that it doesn’t have to cost as much as you might think to get a great video out there to promote yourself, and we’d love to help you in the process of building your brand!”
Most businesses commonly overlook the fact that video is extremely valuable for their initial marketing plan, but studies have shown that it increases dwell time, traffic, leads and sales. If you’re looking for a way to establish yourself as the new business owner, Altitude Motion Media is more than happy to help you rebrand your business.
Buying a business is undoubtedly one of the most serious ventures many of us will ever partake in. It isn’t something to enter into lightly, but shouldn’t be shied away from either just because of the risk it poses. With some of the best experts in Lincoln only one call away, you can rest assured that your buying process will go as smoothly as possible. There are almost always going to be unforeseen situations that arise, and those instances are where the professionals of Lincoln really shine. We encourage all local entrepreneurs to seek the assistance of professional help as you carve a path towards success. We want you to succeed!