Having a business plan to map out your business needs is a great way start out your new company. Our business brokers at Rockrose Realty suggest knowing what your company needs are before you buy. Take a look at these six things to look out for when purchasing an existing business! If you have any further questions, feel free to contact our offices in Orlando to find out more!
- Know if you can assume the seller’s lease
This should be one of the first steps you should take before you buy a business. Determine if the previous owner is leasing the premises where they conduct business. Find out how long the lease is and is the landlord will let you assume the business as is. If not, you will need to find a new location.
- Get to know the employees and the business needs
Getting to know the employees will give you the best insight into their needs and well as the business’. They are more than likely ready and willing to be open about the current state of the business, and better still, will probably have suggestion on what the company needs.
- Know the assets
If you are buying a business corporation or LLC, you absolutely do not need to buy stock in the company. Instead, offer to buy an asset of the business so that you have a more lenient tax treatment and so that you do not inherit any liabilities the previous owner might have.
- Know the payroll and sales taxes
Even if you buy business assets, some states can assume authority and hold you liable for the previous owners owed sales use, payroll, and other business taxes. Find out which payroll service the previous owner is using and make sure they are current in their employment tax payments. If not, make sure these needs are met before you assume responsibility.
- Know their prepaid expenses
For example, if the company you are looking at has a scheduled as marketing contract for example, you need to determine if they are willing to sell you those accounts. Chances are, they won’t be included in the predetermined contract. If they are not willing to hand over those prepaid expenses, then this is something you will have to work out from scratch. Our business brokers at Rockrose Realty will be able to help you with this strategy.
- Know their inventory
Taking a look through the company’s inventory history will help you predetermine what the business might need in the future. Get a record of the company’s past and present inventory list so that you can set the precedent for future product needs. This might also be a great conversation to have with the employment team. As the regular day to days, they will have the best understanding of what customers are looking for. They can help you determine what sells and what doesn’t so that you can adjust you inventory list as needed.
There are a lot of business needs you will have to consider before purchasing a company. Get in touch with one of our business brokers at Rockrose Realty in Orlando to help you get started.