POTENTIAL RISKS WHEN BUYING A BUSINESS – BUSINESS DEVELOPMENT

September 25, 2011
0 Comments , on Articles, Risks, by

POTENTIAL RISKS WHEN BUYING A BUSINESS – BUSINESS DEVELOPMENT
Having identified some of the potential benefits, let’s take a closer look at some of the risks associated with buying a business.

LOCATION: The business could be located in the wrong premises, and new premises might be required to ensure ongoing success.
LEASE: The rental may not be market related and escalation per annum too high. The lease could also contain very negative terms & conditions.
PROBLEMS AND LEGACY ISSUES: You may be taking over major problems that the previous owner has created and/or has not told you about. E.g. a key customer leaving!
 
When looking for potential business there are a number of ways you can source prospects. You could:
  • Look in newspapers under the businesses for sale column,
  • Place an advertisement in the newspaper,
  • Search on the internet,
  • Contact a business broker,
  • Contact other agents,
  • Speak to family and friends (for their contacts) or
  • Directly canvass businesses that appeal to you.
 Don’t buy what the broker wants to sell you just for the sake of buying a business. Look for and get the business you want and deserve. It probably won’t be 100% of what you want, but then why would you buy a business that you do not feel you can grow and develop?

More in this category: IABC Operating Timelines Amid Safety Concerns | IABC Group » Business Rescue – Changing the Landscape of Business Advising in South Africa » Salary payment still best option for business owners » Sars’ revenue collection increases by 6.3% y/y, but misses Treasury target – This Could Only Mean One Thing for Tax Payers » Impact of the Vat Change Effective 01 April 2018 on Transactions » Value Added Tax (VAT) from 14% to 15%, effective 01 April 2018 » Job disruption is coming to accounting too » » HIGH LEVEL SUMMARY OF PERSONAL TAX CHANGES ARISING FROM THE 2018/19 BUDGET SUBMISSION » IABC – NOW A GOLD LEVEL SAGE RE-SELLER FOR SAGE PRODUCTS » How Compliant is your VAT Administration? » 2012 Tax Season is Open » Softline Pastel Accounting & Payroll » Tax compliance, obstacles encountered by small and medium enterprises in South Africa » Audit vs. Independent Review for Companies » Leasing vs. Buying – Corporate Finance » Security around VAT Registrations and administration – Taxation » ENTERPRISE RISK MANAGEMENT » 2011 Message from the MC » SEVERE NON-COMPLIANCE PENALTIES – (Taxation) » Importance of Sound and Effective Business and Financial Controls – Enterprise Risk Management » OUTSOURCING – Business Management »
Previous Post Leasing vs. Buying - Corporate Finance
Next Post Audit vs. Independent Review for Companies

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.