Are you considering starting a business in Florida? If so, you may find that it makes more sense to purchase an existing business. An existing successful business has trained employees, an established customer base, and sufficient cash flow. However, there are some potential pitfalls. Here are a few things you should consider when purchasing a Florida business.
First, whether you are starting a business from scratch or purchasing an existing business, think about your ability to run a business. Do you have experience running a business, or resources to help you along the way? You’ll also want to think about whether you like the industry; it’s best to purchase a business in an industry you like and care about.
Once you have found a business that you are considering purchasing, what should you consider? First is the business’s track record. How long has it been in business? How is it doing financially? Rate the current health of the business, and try to determine if the business is growing or slowing down. Also ask the current owner why they are selling, as this could give insight into the current and future state of the business and the industry it is in.
Is a fair price being asked for the business? To determine this, you’ll have to evaluate the value of the location, fixtures (such as equipment and furniture), and existing inventory. Make sure that you know exactly what will be included in the deal; do not assume that everything you see is considered part of the business sale. You’ll also need to consider the value of intangibles such as the established customer base, trained employees, and existing cash flow. Finally, the value of the business is also based on its reputation (which you can measure through internet reviews, BBB complaints, and other means), along with industry factors such as market size and local competition.
Once you’ve had a chance to evaluate the track record and value of the business, it’s time to agree on a fair price. You may need an appraiser to help both sides come to an agreement on purchase price. These negotiations also include a determination of which assets you will buy as part of the business, and setting the payment terms. Finally, create a written sales agreement and have a business lawyer review it before you sign. You’re on your way to starting a business in Florida!