The Key To Buying A Business - Getting Good Deals!

I’m sure, at some point, some of us have that itching desire to “be your own boss”. We imagine all the wonderful benefits of calling the shots, deciding the direction of the business, and having heaps of money because of successful businesses.

Some of us then decided to take the natural step and “just do it”. We would then proceed to dip into our savings, borrow money from friends and financial institutions, or perhaps sell some equities we are holding on to. And we merrily register a company and start working! The scenario sounds really familiar!

That was me! I sold off my home to raise capital for my ventures into fund management, music production and education. I registered the company and began working to build something I can call my own.

The thought never occurred to me that one can buy a business, instead of starting from the ground up. But coming to think of it, even if the thought did occur to me, my pride (and cash position?) would not allow me to do so. I want something to call my own!

And that is precisely why many of us will never consider buying a business. A matter of pride. Of course, there are other reasons.

• Staff Problems: We are inheriting staff that has never worked with us, that has been answering to someone else. Of course, those of us who are newly employed by a company or are posted to a new division also have the same problems. And how do we know we won’t get the same problem with staff we newly recruited?
• Hidden creditors and debts: This one is a potential trap to watch out for. Experienced business buyers know how to get over this one, like getting the seller to make a Statutory Declaration (which means you can be punished by law for declaring falsely), or co-signing or any number of tricks that a good business broker should be able to help you with.
• Business Ill-will: Again, another problem. What if many suppliers refuse to work with the company, or many customers would never want to even hear of the name of the company again? Or some influential “terrorist” has been starting a hate campaign because of a faux pas in customer service by a staff in the past? But there again, a good business broker should be able to help you with that, to make sure you don’t walk blindly into a deal!

Article Source: http://www.content.onlypunjab.com

Michael Chan used to be a teacher, before he left to run a managed fund. When his business failed, he returned to teaching, and is currently a Department Head at the Shanghai Singapore International School. He constantly applies his business acumen to his job, to add value to his employer. His thoughts on K-12 education and on financial education can be found in his blog at www.senseimichael.com

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