SELLING YOUR BUSINESS?
Are you looking to sell your business? Our team of professionals at Mercantile Realty is here to help.
Selling a business in Canada can be complicated, but with our expertise and resources, we can make sure your business gets the best deal and terms.
With our knowledge and experience, you are sure to find the perfect match for your business.
Frequently Asked Questions
There are several potential advantages to buying an existing business rather than starting a brand new one from scratch. Here are a few reasons to consider:
Established customer base: An existing business already has a customer base, which means you don’t have to spend as much time and money on marketing and advertising to attract customers. You can start generating revenue right away.
Proven business model: An established business has a track record of success (or failure) that you can review before making a purchase decision. This can give you a sense of the business’s potential profitability, as well as any operational or financial challenges you may need to overcome.
Established systems and processes: An existing business likely has systems and processes in place for operations, finance, and human resources. This can save you time and effort in setting up these systems yourself.
Established relationships with suppliers and vendors: An existing business may have established relationships with suppliers and vendors that can help you obtain goods and services at better prices.
Established brand: An existing business may already have a recognizable brand in the marketplace. This can help you attract customers and build credibility with suppliers and other business partners.
Of course, there are also potential downsides to buying an existing business, such as the need to invest more upfront capital and the potential for inheriting any legal or financial liabilities associated with the business. It’s important to do your due diligence and work with a qualified professional, such as a business broker or attorney, to help you navigate the process.
Certainly, you need adequate capital to buy the business and to make the improvements you want, along with maintaining some reserves in case things start off slowly. You need to be willing to work hard and, in many cases, to put in long hours. Unfortunately, many of today’s buyers are not willing to do what it takes to be successful in owning a business. A business owner wears many hats. Too many people think they can buy a business and then just sit behind a desk and work on their business plans. Owners of small businesses must be hands-on.
Upon finding a business that you are interested in, the business broker can provide answers to your questions immediately or conduct research on your behalf. After obtaining preliminary information, the broker will prepare an offer based on the price and terms that you deem appropriate. This offer is typically conditional upon your approval of the actual financial records that support the figures provided to you.
If you and the seller cannot agree on price and terms, there is little reason to continue the negotiation. The offer is then presented to the seller, who may approve, reject or counter with their offer. The ultimate decision is yours whether to accept the counterproposal or move on to consider other businesses.
In the event that you and the seller agree on the price and terms, the next step is for you to conduct your due diligence. As the buyer, the responsibility of verifying the business’s financial records and other areas of concern falls on you. You may choose to seek advice from outside advisors or conduct the process on your own. Once you have verified all pertinent information, closing documents can be prepared, and you can successfully complete the purchase of the business. You will then join many others who have taken the leap to become self-employed.
The thought of purchasing a business can be exhilarating, especially for those who have aspired to be business owners for many years. However, it is crucial to recognize that the decision comes with a significant amount of emotion. It’s important to take a step back and thoroughly evaluate various critical factors before committing to a decision. This careful evaluation will assist you in determining whether or not you are making the best financial and life choice for yourself.
When searching for a business to purchase, it is crucial to consider only those businesses that you are comfortable owning and operating, as having “pride of ownership” is essential for success. Additionally, the business must be within your budget and generate enough income to cover your expenses, including loan payments.
However, when evaluating a business, it’s important to look beyond its current state and consider how you can improve it to make it more productive and profitable. The adage suggests that one should not purchase a business unless they believe they can do better than the current owner. In some cases, a struggling business can thrive under new ownership, while a previously successful business may struggle or close under new management. Ultimately, the success of a business depends on the abilities and efforts of the owner.