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Careful thought and review important when purchasing a business

It can be a very exciting moment for a person looking to purchase a business: they have finally found a business they feel would be a good fit for them, and the business is in their general target price range. In the midst of the excitement and anticipation a person can feel in such a situation, they might be tempted to rush through the purchase of the business so they can take ownership of the business as soon as possible.

However, it is very important for a business buyer to not let excitement and a desire for a business purchase to go quickly lead to them being careless or missing important things when it comes to the purchase transaction. Such transactions are very impactful and complex things. Errors or oversights made in connection to them could have long-lasting implications.

This includes errors/oversights made in relation to legal matters related to the purchase. Skilled business lawyers can help business buyers with being aware of what legal matters are present in relation to the purchase transaction and assist them with ensuring these matters are addressed in an appropriate fashion.

Also, prior to buying a business they are interested in owning, it can be critical for an individual to give a very close look at the business and carefully consider their motivations to ensure the business actually is as good of a fit for them as they initially thought. Examples of things it can be very important to carefully review and consider before buying a business are:

  • What specific goals one has for the business purchase and how well the business in question would be able to fulfill these goals.
  • How solid the business’ financials are.
  • How the business, given its current products/services, is likely to fare in the future.
  • What the main things are that the business derives its value from.
  • Whether the ownership of the business changing will impact the business’ main value-driving aspects.
  • What reasons the seller has for selling the business.

Source: CNBC, “7 questions to ask before buying a business,” Kayleigh Kulp, May 24, 2016

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