Are you considering the exciting opportunity of buying a business? Taking the leap into entrepreneurship is a thrilling and potentially rewarding venture. Whether you’re a seasoned entrepreneur or a passionate individual looking to make your mark in the business world, the prospect of buying a business presents a myriad of advantages and opportunities.
Buying a business is a life-changing opportunity. It’s a chance to try your hand at something you’ve always dreamed of doing. Or, for those of you who are looking to expand an already existing business, it’s a chance to reach more people than ever before.
However great the reward, it is also important to acknowledge that buying a business is not without its challenges and risks. Business transactions require significant attention to detail and demand a lot of attention – it’s nearly impossible to do alone. Conducting thorough due diligence, seeking professional advice and carefully evaluating the business’s financials, market conditions and growth potential are critical steps in the decision making process.
Buying a business is a monumental decision – you shouldn’t make it without first consulting those close to you and other professionals. With the help of Omaha professionals and the amazing community, get ready to embark on a path that could lead to new horizons and a prosperous future as a business owner.
A Bank That Cares
Choosing a bank to work with for buying a business and future business endeavors isn’t an insignificant decision. Having the right bank by your side will set you up for success. You want to work with a bank you can trust, a bank that is more than just a bank.
Cornhusker Bank (cornhuskerbank.com), a bank that acts as your partner, assists with and provides customized lending options surrounding a business purchase. Their loan options can be tailored to fit your specific needs. But, before diving into the buying process, VP/Relationship Manager Tyler Albers advises that you consider how sales will be impacted with a change in ownership as well as if the seller will be staying on with the company short term in any capacity to help with the transition.
“Having an initial business valuation completed by a reputable source is a key starting point. If the purchase price falls at or under the valuation, the buyer can then evaluate how much debt the business’s existing cash flow can service. The buyer should have a team of trusted advisors involved who can provide objective advice in a multitude of different areas including valuation of the prospective business, insurance, financing, accounting, etc.”
Whether you’re starting out or expanding your operations, the Cornhusker Bank team is ready to help your business move forward. Their experts live and work in the community and understand the local environment. When working with their knowledgeable staff, they will build a trusted relationship with you and your team, understand your business and deliver smart, personal advice that helps you navigate the future, no matter what it may bring.
Question Every Detail
The most interesting aspect of buying a business is that everyone is optimistic and excited. It is a fun environment to operate in, however what is euphoric now may cause you to look past some potential challenges. It is important to always stay grounded in your core beliefs when you start a new business or purchase an existing one.
At Cyberbacker (cyberbacker.com), it is their job to bring up every possible detail when their client is considering buying a business. Attention to detail is critical. Understanding the financials of the purchase and the business in question should be one of the first steps in the decision making process.
Determination of value should be based on the company’s past performance. Is it reasonable to expect the income to remain constant? Itemizing the current assets and inventory is a part of the purchase that allows you to verify what is in the contract and that it actually exists. Errors in expected inventory is a common occurrence and must be dealt with prior to and immediately after closing on a business transaction. Recognizing the value of the assets you are buying and what is considered as “blue sky,” or potential business, may affect the profitability of your business and requires serious consideration.
According to Donald Kracke, a certified business coach with BspokeIQ, “You can have reasons or results, and you can’t have both.”
For the best results, Donald recommends preparing a budget that is obtainable and sticking to it. Your budget keeps you focused on what is happening in reality, keeping you from being overly optimistic about unrealistic goals. Your budget keeps you focused on obtainable expectations as you strive to make your business a success. Always set a goal so that you can prepare a clear plan on how you will proceed toward your target.
Place Extra Emphasis on Receivables
When buying a business, it cannot be stressed enough to do a thorough evaluation of the business you are interested in purchasing. One of the most important aspects of a business to factor into your buying decision is the company’s receivables.
It’s important for potential business purchasers to understand that not all of the billings a business sends out are going to be paid. Don’t leave your budget so tight that nonpayment results in the business going under. It’s good to know about receivables up-front to create a policy for handling those cases of nonpayment. AR Solutions (arsolutions.com) is happy to consult with clients to help them set up their receivables process in a way that increases their in-house collections to prevent future issues.
As a collection agency, AR Solutions will work closely with you to determine the reason for any nonpayment of receivables and estimate what you can expect to receive from each instance. If you’ve owned a business before, AR Solutions can track and collect on receivables for you, so you can focus on what your business does to make money—and you don’t pay AR Solutions unless they collect the debt.
“We will act as an extension of your new company and conduct direct communication with your clients,” said Founder Aaron Newell. “Our competitive fees are also contingent upon collection, so you do not pay unless we collect.”
Buying a business is undoubtedly one of the most serious ventures many of us will ever partake in. It isn’t something to enter into lightly, but shouldn’t be shied away from either just because of the risk it poses. With some of the best experts in Omaha only one call away, you can rest assured that your buying process will go as smoothly as possible. There are almost always going to be unforeseen situations that arise, and those instances are where the professionals of Omaha really shine. We encourage all local entrepreneurs to seek the assistance of professional help as you carve a path towards success. We want you to succeed!