Buying, Valuing, Due Diligence and Business Partners
10 Tips Before You Buy a Business
From creating business plans to researching the competition to finding funding for your new business, this quick guide summarizes what you need to know all in one place. If you plan on opening a specific type of business such as a restaurant, how many eateries are similar to your idea? Where does one obtain the money to start a business, and where does one start when writing a business plan? All of these questions are answered and you will find more needed items you need to know before you venture out into the entrepreneurial world.
How to Value a Business
How do you determine the value of the business you want to buy? With this post, you’ll learn how to calculate both equity and market value to ensure you’re making (or accepting) the right offer. It may be simple to determine your equity based on how much money you and your partners have invested but how is market value determined? Is it cost based? Is it based on comparable businesses? These are must-knows and here you'll learn how to do this with ease.
Why Due Diligence Is Important
Once you’ve found the business you want to buy, you need to understand what due diligence is and how to complete the process. Here, you’ll learn what due diligence is, what financial items you should ask for, how to review them along with other must-know items you must ask the existing owner before you sign the buy/sell agreement. Skipping due diligence is never smart and if you do and are stuck with useless assets or too many liabilities you will have no one to blame but yourself.
Intellectual Property Due Diligence
More often than not, the business you are buying will come with some intellectual property (IP) such as trademarks, slogans, signs or even the telephone number. Find out how to value the IP and avoid overpaying for these items. You may think you're being offered a great price on a trademark, but what if that trademark is about to expire and requires a massive amount of funds to renew it? Or, what if you're buying an existing business and the seller doesn't disclose all he or she knows about their IP? Again, skipping due diligence on any level is never smart.
What If You’re Buying a Franchise?
The franchise business world can be tough to understand and master and then there’s the all-important (and legal) franchise agreement. If you don’t know how franchise agreements work and what the franchisor expects from you, this is a must read article. Can you break a franchise agreement, sell a franchise or just transfer your interest in the franchise? Don't venture into the franchise world without a review of this post!
All businesses need to have an entity structure such as a corporation, partnership, limited liability company or sole proprietorship. Learn the differences of each in this business entity guide overview. Are you looking for tax savings or personal liability protection? If so, which business entity is best for you? Can a corporation be a partner in your entity or do partners need to be actual individuals. All these questions are answered here.
Limited Liability Companies and S Corporations and Partnerships
Most small businesses will choose either the Limited Liability Company (LLC) or the Sub-Chapter S Corporation. Learn the advantages and disadvantages of each to help you better choose the right entity for your business. New business owners often choose the limited liability company because they feel assured their personal assets are protected. This is not always the case, especially if you and your partners sign personal guarantees on loans or equipment leases. A must read for those forming LLCs.
Will You Have a Business Partner?
If your business includes another or even others, that means you will have business partners. Learn ten important tips on how to negotiate with business partners to get what you want and determine what’s best for the business in the long run in order for it to be profitable. Who should hold the larger percentage of ownership in the business—you or your partner—and what should those percentages be based on? How can you determine if the partner you choose is the right partner or if he or she will leave you holding the bag during tough times? Important business partner knowledge can be found in this post.
How to Find a Great Business Partner
How does one find the very best business partner? Here are effective resources to aid you in finding the perfect business partner to help you fund and manage your business. Do you want a silent partner or a hands-on management type of partner and which is better? What should you ask a partner to reveal as far as financials and tax returns? Again, finding a great business partner also requires some due diligence on your part.
What If You Have a Bad Business Partner?
This happens to new entrepreneurs more often than not. Not only will you learn how to identify a bad business partner, but how to get rid of them. This can happen to you but once the agreements are signed, are you stuck? Not in every case! There are ways to find new partners and even buy out your bad and ineffective partner but learning how to do this is an art in and of itself. Learn how to master it here.
The Pros and Cons of a Family Business
Starting a family business is an American standard but will it work for your family? Before you decide the family biz is the best route for you, find out the pros and cons along with some important tips on owning and running a family business. What if you hire non-family members as employees but treat your family members differently? Is this legal? Then there are those difficult family members who want to be part of the business but never want to put in the hard work to help the business achieve success. Learns the ins and outs of why a family business can be good and bad.
Now that you’ve found a business to buy, understand business entity structures, and how to determine the right partner for your business, where do you find the funds for your business?