Buying a Business
Discussion
Hi
I'm desparate to be my own boss and have my own business. I have considered start-up, but I am lacking ideas for what I want my business to be, as I want it to be something which is not offered by someone already, or something new. However I am sure at some point I will have this idea, and start it.
My other consideration is to buy an existing business which is established, which I can almost hit the ground running. I am confident in my ability to drive a business forward and make something of a business which I see has potential.
I have very little capital (unless I re-mortgage) and so would have to borrow, or re-mortgage, or a combination of the 2.
The business would probably be run fairly part time at first, alongside me working a full time job, to ensure my income does not suffer - is this advisable? The business would have to replace a fairly substantial salary and benefits package for me.
Now to my questions, where would I start looking for a small business to buy, what is the best place to look, how would I evaluate that business to understand its current performance, and why the vendor was selling it. What other considerations should I take into account?
Cheers
I'm desparate to be my own boss and have my own business. I have considered start-up, but I am lacking ideas for what I want my business to be, as I want it to be something which is not offered by someone already, or something new. However I am sure at some point I will have this idea, and start it.
My other consideration is to buy an existing business which is established, which I can almost hit the ground running. I am confident in my ability to drive a business forward and make something of a business which I see has potential.
I have very little capital (unless I re-mortgage) and so would have to borrow, or re-mortgage, or a combination of the 2.
The business would probably be run fairly part time at first, alongside me working a full time job, to ensure my income does not suffer - is this advisable? The business would have to replace a fairly substantial salary and benefits package for me.
Now to my questions, where would I start looking for a small business to buy, what is the best place to look, how would I evaluate that business to understand its current performance, and why the vendor was selling it. What other considerations should I take into account?
Cheers
Good place to start looking is Daltons, either buy the weekly paper or go online to www.daltonsbusiness.com
Some good advice on there aswell with a list of finance companies etc..
Some good advice on there aswell with a list of finance companies etc..
If you've got very little capital then obviously this limits your options of buying a company. For small companies, typically you'd need to spend about 3 times the profit of the company. So, for example, a company making £30K profit might sell for about £90k. However, such a company may have, for example, £20k in net assets so you'd be paying £70k for goodwill.
A web-site which is quite good is:
www.business-sale.com/
However, I've a feeling that most companies listed on there may be a little too big for what you're after.
Alternatively, if you're prepared to spend, say, £100k it would be worth thinking what you could do with £100k by setting up a company.
A web-site which is quite good is:
www.business-sale.com/
However, I've a feeling that most companies listed on there may be a little too big for what you're after.
Alternatively, if you're prepared to spend, say, £100k it would be worth thinking what you could do with £100k by setting up a company.
Here's a website that has loads of info on starting your own business or buying an existing one www.startups.co.uk
This is a good one if you're after some inspiration www.springwise.com
Their monthly newsletter is pretty good too.
Good luck!
>> Edited by 6ixZero on Saturday 25th February 11:34
This is a good one if you're after some inspiration www.springwise.com
Their monthly newsletter is pretty good too.
Good luck!
>> Edited by 6ixZero on Saturday 25th February 11:34
I set-up and sold several businesses, and agree with the above comments.
You also need to be careful not to end up as an employee, whether you own the business or not. It's very easy to end up in the daily grind and lose the visionary aspect.
Two important considerations are:
Why is the vendor selling? Trust me, 99% of the time there's a hidden agenda.
How long would it take to recoup your initial investment? You'd probably find £100k (which can then be geared) spent in Real Estate in an emerging market will make a lot more money.
You also need to be careful not to end up as an employee, whether you own the business or not. It's very easy to end up in the daily grind and lose the visionary aspect.
Two important considerations are:
Why is the vendor selling? Trust me, 99% of the time there's a hidden agenda.
How long would it take to recoup your initial investment? You'd probably find £100k (which can then be geared) spent in Real Estate in an emerging market will make a lot more money.
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