Buying a Business: 11 Ways to Minimize the Risks

Transcript

Andy and Jessica have started this podcast because they realized there is not enough information about how to buy and sell a business, and one recurrent theme in this process is that people are scared, for some of the people engaging in purchasing a business for the first time and being involved in an unknown process, triggers uncertainty and insecurity.

Something some people don’t know is that buying an existing business is definitely less risky than starting one, since, at the end of the day, when you are buying a business, you are betting on yourself, on your own ability to run that business. If you have made the decision to buy a business, you saw the return on it and you are ready to jump in, you are probably asking yourself: How do I minimize the risks? Listen to this episode to find the 11 ways in which you can reduce risks; you will hear some examples and receive valuable information that you can implement right away, feeling more empowered to make the right decisions.

Listing of the week: Chris Cantwell (Denver). Perfect business for first-time entrepreneurs. Carpet cleaning business. Franchise model offering direction about how to grow the business. Sellers are willing to carry 50% of the deal. Price: $110,000. $68,000 in cash flow. Start with 50% and keep on with $1,000 in monthly payments. Call Chris at 303-408-3882 or email at [email protected].

Key Takeaways

[2:45] 1. You are going to need a good attorney.
[6:23] 2. Hire a good business accountant.
[8:55] 3. Do your homework!
[10:31] 4. Tuck the money away: Reserve money for the first year in business.
[12:39] 5. It takes work to buy a business.
[14:40] 6. Use a business broker.
[17:22] 7. Have money on escrow or on a seller’s note to take care of all liabilities.
[19:14] 8. Don’t make any changes in the business for at least six months.
[21:38] 9. Insurance.
[23:37] 10. Buy a business with good systems in place.
[25:55] 11. Relationship with the seller post-transaction.
[29:53] Deal of the week: JT Tatem (Greenville). Landscape design firm. 20 years in business in South Carolina. SDE $245,000. Price $780,000. Property of 17.9 acres $545,000. Deal closed at $1.25 million. SBA-funded deal. Buyer paid his own down payment.
[33:44] Listing of the week: Chris Cantwell (Denver) Perfect business for first-time entrepreneurs. Carpet cleaning business. Franchise model offering direction about how to grow the business. Sellers are willing to carry 50% of the deal. Price:$110,000. $68,000 in cash flow.

Mentioned in This Episode

• United Franchise Group
• Transworld Business Advisors
• Transworld on Linkedin
• Transworld on Facebook
• Call us
• Email us
• Call JT Tatem
• Email JT Tatem
• Call Chris Cantwell
• Email Chris Cantwell