Buying a Business in British Columbia, Canada
The key to successfully buying a business is to fully prepare and investigate before you commit yourself. Some of the questions that need to be asked include:
- What's the future of the product or service? Are sales expanding?
- What about the location? Is it good? Are there zoning changes planned?
- Is there an established market with a good repeat customer base?
- What about the labor situation? Are there key personnel who contribute significantly to the success of the business? Can you keep them? Must staff salaries be adjusted soon? Is the seller's personal role critical to success?
- What about warranties for work completed? Are you assuming any risk of liability for the seller's actions? Will customers expect you to make refunds or honor warranties or risk losing goodwill even though you are not legally obliged to do so?
- What about the Seller? Will he/she agree not to set up in competition for an agreed time? Will the seller train and assist you after the purchase?
- What kind of Return should you be looking for? What is reasonable?
- How would you value the business?
- What about leverage consideration?
- Is working capital included in the purchase price or will you have to come up with more money?
The role of a business broker to source likely targets, to value those targets, to negotiate the terms of the acquisition and to arrange financing plays an important role. A professional broker will match your buyer criteria with the specific characteristics of the target business when considering buying a business.
