When considering starting a business, many people think about the process it takes – formulating the idea, then growing it from its grassroots to a reputable and profitable business. Schmooz started with an idea like this! However, it is important to remember that there are lots of opportunities to become an entrepreneur; you can purchase a franchise or as facilitated through a tool like BizON, you can become a entrepreneur by buying an already established business from a selling owner.
When given the opportunity to share our insight on buying and selling a business with BizON’s community, my team and I got to thinking about a way to keep the goals of buying or selling clear. We came up with a list of things I would have needed to take into consideration – grouped into 3 categories: The Tangibles, The Intangibles and The Numbers
The Tangibles – Assets
Important to any business are the assets it owns. This is literally what you would be paying for if you were to buy a business. If the business has any products or materials that are necessary for servicing the clients (or resale), this is inventory that needs to be examined and appraised before buying. Depending on the type of business or nature of the agreement, any buildings, furniture or equipment currently owned by the business may need to be taken into consideration as well.
For a business like mine, it would also be extremely important to take the employees of the business into consideration. After all, Schmooz is where people and ideas meet (online)! I am honoured to say that my company, Schmooz wouldn’t be what it is today without the wonderful team we have….and this brings me to the Brand!
The Intangibles – Brand
What are people’s opinion about your company? What do they like? What do they not like? What are they currently saying? What is the market and customer history like? What have they said about you company in the past? These are all questions to take into consideration as it is important to make sure the business you’re buying has a favourable reputation. Getting access to the business’ Social Media accounts is also important not only to start engaging the community but also to get access to data that is sure to provide information and answer some of the questions above.
The Numbers – Profit
After going over both the tangible and intangible details, it is time to get to the numbers. The first question to ask is whether the company is profitable or not. I would have wanted to make sure that the company was either profitable or had the potential – with some added hustle! This should include a comprehensive analysis of the most recent as well as previous Financial Statements for at least 5 years of operation. Doing this will provide an overview of the company’s history and any important trends to be aware of, and also if there is anything sketchy going on! I would do my due diligence and find out if there are any contracts or legal documents regarding the business that I need to be aware of.
Ultimately, whether you choose to start your own business, sell your business or buy an already established business from a seller is up to you. These are just some of the things that should be considered and even if they do not seem relevant in the moment, they will be at some point in the future! Good luck 🙂
At Schmooz Media, we understand that customers are your best brand ambassadors. That’s why we’re excited to create custom social media marketing strategies for small businesses, and take advantage of what their customers are already saying on social media.
Zoe Share is the Founder & Chief Executive Schmoozer of Schmooz Media and the author of this guest blog.
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