Business Opportunities - Buying and Selling Business Opportunities
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If you want to buy a business from someone, you probably want to eliminate the risk of starting from scratch. You have an established customer base and an idea bearing fruit on your platter. While you do not have to pay federal tax for buying a business, you might inadvertently buy outstanding tax liabilities along with the business.
States can impose transfer tax. If the tax is for the seller to pay you have to ensure that it is paid else they might come after you. In addition, taxes like the Annual Personal Property Tax, taxes on business fixtures and inventory have also to be cleared out. Since problems like those, that these cannot be noticed until it is a trifle too late you might want to take professional advice on the score.
A business savvy attorney and a tax pro would be ideal. A business appraiser can help if you want to be sure of the deal before clinching it.
You could not use a broker while buying a business if you know what kind of property you want to buy. On the other hand, you if you are fresh on the field, the broker can help make the appraisal and see you through the negotiations. You do not have anything to lose because brokers usually get their commissions from the sellers.
Before picking a good broker, it is important to ask for references. A good broker should have hundreds of listings.
If you want to sell your business and have to advertise for the same, a certain level of secrecy has to be observed. Discretion is important lest competition hampers performance. Placing a classified advertisement in the newspaper usually ensures this.
A blind e-mail address and a cell phone number is all that should be left for reference so you do not give yourself away. You have to start preparing for the same at least a year in advance by assessing financial books to prepare audited financial statements and formal records of transactions.
All contracts have to be looked into so that the new owner does not find a bunch of them expiring just as he moves in. A procedure manual for handling the business would be a welcome deal. Letting the buyer in on unwritten techniques will also help.
If the business includes real estate, separating the two is important lest it complicate the transaction. It is important to be selective of potential buyers. Asking for certain information of them could do this. The advertisement itself should contain concrete information like the previous year’s sales, the strengths of the business the employee strength among others.
Checking on the advertisement before it goes into print is a good idea. Offers like help with the transition attract buyers. Moreover, you have to display some skill in answering queries about your property. For these tasks, hiring a broker is a good idea. You then have access to the links that a broker enjoys.
At the same time, you have to be careful that the employees do not hear of the impending sales from somewhere else-you should be the one informing. Also before selling make sure, you know who among the employees is going to move away. Moreover, you can always negotiate the price of your business. The final price you settle for would be within 20% of the asking price. Urgency in dealings can affect the price largely.
You can sell the business on your own without a broker, who would typically charge a commission of about 10%, if you already have a buyer in mind and feel up to the task of carrying out the deal with your lawyer and accountant. Even with a broker, a lot of work has to be done by you because ultimately you know the business and are the best person to satisfy queries.
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