Deciding whether or not to buy a business can be a complex analysis. While there will be numerous factors to consider, the primary question for most buyers is whether or not the proposed enterprise will be successful. While this may seem like a simple inquiry, the answer will depend on the degree of risk the buyer is willing to assume and other variables. The good news is that there are steps a buyer can take to assess your business acquisition:
Growing Your Business
Before you can thoroughly evaluate a proposed business acquisition, it will be important to take stock of your existing operations and holdings. The purpose of doing so is to determine whether this is the opportune time to acquire a new entity or enterprise. One of the best ways to assess your growth readiness is by consulting with an experienced business attorney. Your business lawyer can help you examine your current circumstances and identify ways to prepare for your future acquisition.
Required Knowledge and Experience
Another important area to consider is operational knowledge. When you are looking into buying an existing business, you need to know what will be required to support its functionality and growth. You want to make certain your skills, knowledge, and experience are a suitable match for the enterprise and its needs.
Products or Services
You will also want to consider whether the business sells products or services. It may not be an issue if you feel confident in your ability to promote and market either type of commodity. However, if your experience and skill set is geared toward product-based sales, you will want to explore and understand the differences that may come with a service-based model.
Risk Tolerance
All business ventures come with some degree of risk. In some cases, such as when the acquiring entity has excess capital, the stakes will be relatively low. However, some ventures may require significant investment. Therefore, before you take steps to acquire or merge with another enterprise, it will be important to determine your level of risk tolerance.
Risk calculations can be complicated, and it’s important to have the right advice information before they are undertaken. By working with an experienced Florida business attorney, you can help ensure you have all the information you need to determine the appropriate degree of risk for you and your business goals.
Due Diligence
The term “due diligence” can be used to refer to various tasks a buyer can take to evaluate an enterprise’s representations. Completing your due diligence will mean ensuring the seller’s claims are true. For instance, a seller may claim that the entity is profitable and has reliable sources of recurring revenue. As a buyer, you will need to verify that these assertions are accurate before acquiring the enterprise. This may involve reviewing tax returns and financial reports as well as looking at other documentation and resources.
These are some of the many tasks you will need to complete with evaluating a potential business acquisition. The best way to help ensure that you cover all of the essential areas is by working with an experienced Florida business attorney.
Contact an Experienced Florida Business Lawyer
Attorney Richard Sierra at the Florida Small Business Legal Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.