Options Of Buying And Selling Business
Let us say you have sold your business and now have a, significant capital sum and a lot of free time. Then one serious option is to put at least half of your capital gain into relatively secure investments, to protect from the worst possible downside. The remainder you can have as a facility to build businesses. This makes a lot of sense because of the following:
- You have considerably more experience now than when you started your first business. You have been there and done it so why not capitalize on that skill.
- Buying a business substantially cuts risk.
- Businesses can be bought for no or little money down. Owners financing, factoring existing invoices, partners.
- Any sort of financing will be much easier for you as you have a proven track record of delivering the goods.
- You can make your hobby and business buying, value adding and selling businesses. It can be great fun and offers very significant capital gains.
If this is a goal then you need to consider:
- How to buy a business while limiting your financial risk.
- How to find and identify bargains.
- How to add at least 10% to the value immediately.
- How to add value to the business on a daily basis.
- How (and when) to sell for a premium.
People who have had an interesting and stimulating career find that although they can’t wait for retirement, when it comes it is a disappointment. Not having to work for your living, being able to relax at home, read, do the garden, pursue a hobby, travel is very motivating. Most people, when they take a two week holiday, find that they cannot wait to get back to work.
They need to involve themselves in something fulfilling. However luxurious your house or yacht, it just starts to become boring for most entrepreneurs.
Most entrepreneurs come back into business after a short break. They can now pursue business interests without the financial pressures they were once under. Others really do have a consuming hobby or passion they wish to fulfill, like traveling the world. If this is you, then do it.
There are a few golden rules to success in buying and selling businesses.
- Only buy a business in a sector you know.
- Only buy from a motivated seller (to ensure a discount).
- Use a professional intermediary.
- Have ‘something personal’ that adds value from day one.
- Focus on developing the branding.
- Build a ‘money making machine’, i.e. profits are not dependent on you or key staff.
- Work on improving profits rather than sales.
- Find and sell only to motivated buyers (to ensure a premium).
- Each time put 50% of the proceeds into safe investments.