If you are thinking about establishing a business in UK one of the options you may wish to consider is buying an existing and established business instead of starting a new one. When deciding to buy a business you must anticipate that it will require a lot of time and effort to find a business that will suit your requirements.
Business sale UK – benefits
The benefits of buying an established business are vast. The company is already up and running, has a client base and a reliable income and reputation. The business plan and operation procedures are already set in place and the potential problems have been discovered and solved. However, it is very important to always ask the owner as to why he or she has decided to sell the business. The business neglects by previous owners a lot more investments on top of the purchasing price must be made to ensure business profitability.
There are many different channels through which you can find your potential business. Specialised magazines, websites and trade associations will all have a section dedicated to listings of businesses that are being sold. You can also hire a business transfer agent. It is important, however, to check that the agent is a registered member of the National Association of Estate Agents. The agent’s trustworthiness and possession of all the necessary skills and level of professionalism is to ensure the best outcome.
Once you find the business that you are willing to buy it is very important to valuate it. In this case, it is strongly advisable to seek professional help in order to value the market and the business correctly. Moreover, it is very important to have a good understanding of how healthy the business you have interests is. History of the business, current sales, profit and turnover are all strong indicators of how well the business is doing. At the same time, the reasons for sale are also important to investigate.Though, it is crucial to establish contact to the clients, vendors and employees who may give you valuable insight into the company situation.
However, the most difficult part of the valuation is intangible assets. This will touch upon the reputation, supplier relationships, goodwill and the value of the licenses and patents of the company. Keep in mind that the valuation process will affect the decision of buying the business and the price that you are willing to offer for it.
Once you have the decision to make an offer you have to agree on the price with the current owner, giving you enough time to confirm the accuracy of the information provided to you. Granting you an access the business books and records of the company to build a realistic understanding of business performance in the future. The process is known as due diligence and the period can be negotiated to last for at least three to four weeks. At this stage it is important to seek professional advice as solicitors and accountants will be able to help you identify the areas of risk for the business.
The due diligence period will give you enough time to understand what needs to fix in the company, the costs that associates the changes and whether you are willing to take the risk. All areas of the business need to be assessing carefully. It is also advisable to collect extra information outside the business from the landlord, tax office and bank.
Business sale UK – Summary
In summary, taking the following steps should be successful for acquisition of a business:
- Get professional advice! You will need professional help from solicitors and accountants when on all the steps of the process.
- Research the market.
- Arrange finances
- Make and offer
- Negotiate the due diligence period
- Complete the sale!
It is important to understand that after reaching the agreement on the price and terms of sale, the deal may not finalise. Meeting certain conditions of sale is a must, including financial statement verification, transfer of leases, contracts and finances.
Our Approach to UK Visas
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