“Buy a ready business” – now this statement will not surprise anybody, despite the fact that the term “sale of business” appeared not so long ago. In addition to owners who sell their business and entrepreneurs, buying someone’s lifework, in recent years also it has been active appeared and operated the companies that provide consulting, brokerage, appraisal and other services related to the sale of businesses. Why is ready, operating business sold? How to determine its value? How to find a buyer? What are the risks in the transaction? It is these issues will be discussed briefly in this article.
Why does the owner decide to sell the business?
The reasons that a business owner decides to give up business of his life are very different. It is oddly enough, not always sale of the business means that the company is on the brink of ruin. We can distinguish three main causes motivating an increasing number of owners to part with their business in recent years.
Firstly, this is a global liquidity crisis, which affected the access of medium-sized companies to investment resources. In order to grow, many companies need resources, so they either sell their stake in the business, attracting investors and gain access to additional money, or if the company is unable to attract additional investment, just sell the business and go into some other niches.
The second reason stems is connected with the fact that a number of our companies have reached such a level that their further extensive growth is no longer possible or not so interesting. Switching to another level that is better suggests the involvement of additional capital, strategic investors, major foundations, etc.
And thirdly, there are reasons that cannot be generalized. Every business owner can have be very personal reasons, prompting him to part with his company.
As for reasons to buy the business, they also can be divided into three groups. Today in many industries it has decreased the rate of return, profitability has fallen, and in order to survive, you need to grow faster than the market. Purchase of new companies – is one way to increase the quantitative indicators at the expense of gross margins. Secondly, if the company is preparing for certain corporate events and it needs to increase its value, for example, before an IPO or private placement, the purchase of additional business can contribute to the desired goals. And the third reason, forcing entrepreneurs to invest in the purchase of new companies is related to entering the new markets. Today there are many administrative barriers to entry in one region or another and the acquisition of the company provides access to new markets. So, as you see, there are different reasons of selling business and they are not always connected with the bad state of the business.
Business has always been a dream for many people. But nowadays business has become not only a kind of activities and occupation – it has changed into goods. It is not a rare case today when someone buys and sells businesses just to make money on it. Whereas another part of businessmen sells their businesses because of some troubles or inability to conduct it any more. In any case when selling a business it is better to refer to experts who deal with it. And here business for sale site is of much help because there one can learn much details related with this process. Those who live in Canada are advised to check out toronto business for sale or vancouver business for sale experts.
And keep in mind that before dealing with any issue it is better to learn some info about it. And today it is quite easy to do as web technologies give a nice opportunity to find anything you require.