The process of buying a business can seem complicated. Please find below a summary of frequently asked questions in relation to the buying of a business.
How to Buy a Business?
How long does it take to buy a Business?
The time scale to buy a business can vary, some businesses can be bought in as little as 3 months, however the usual time frame to buy a business is 6 to 12 months.
How is a business valued?
There a wide variety of methods to value a business including EBITDA multiple, Asset Method and Discounted Cash flow analysis to name a few. The valuation technique depends on the type of business. Bernard Baxter provides a free no obligation business valuation.
How do I buy a business?
As with selling a company you can you choose to find a business yourself or choose a professional to help with the business acquisition. A professional can speed up the process utilizing their network, seller database and advertising strategies. This often results in a greater number of off market and on market business acquisition opportunities.
What is Buyer Due Diligence?
This is the process where a buyer attempts to identify all issues in relation to the business. This would include Legal, Financial, Tax and commercial due diligence. The process is usually kicked off with a buyer due diligence questionnaire sent to the business owner and their representatives.
What is the difference between a Business Broker, Business Transfer Agent, Business Sales and Mergers & Acquisitions consultant?
There is no real difference, they are all intermediaries with the aim of helping you to sell or acquire a business.
Buy a Business or Start your own business?
A large number of businesses fail in the first few years. By acquiring a business that has been running for a number of years, you are potentially eliminating a number of risks that are usually associated with a new start business.
What is the goodwill of a business?
The Goodwill of a business is effectively the difference between the total business value and the hard assets of the business such as inventory, equipment etc. The cash flow is the mine driver of the goodwill value of the business.