The Advanced Guide to Buying A Business
Written By Business Takeover Aug 09, 2021
It is prevalent to experience the feeling of being burned out at one point where you consider quitting your job and venture into a business of your own. Nevertheless, it can be energy-draining to launch a start-up. Investing in and buying a business in Singapore may be a less strenuous option for those put off by the risk of establishing a business from scratch. However, owning and operating a business is not for everyone. It will require more than passion and persistence to operate a successful business.
Suppose you are currently considering buying or taking over a business; in that case, we have summarised a few critical points that may guide your acquisition process.
Know Your Expertise
Buying a business can be a significant financial commitment (and burden). Always leverage on knowledge and experience.
It is recommended first to explore and look for businesses associated with an industry you are familiar with, one with which you had prior experience. It is easier to manage a business if you know how things are performed inside and out. Avoid putting your expertise to waste by venturing into "unchartered territory".
Evaluate Business Funding
It's challenging to fund a business because it usually requires strict budgeting, but it's entirely feasible.
Plan with the available resources (that you have today). Hire and take advantage of professional assistance and form a network of people who can assist you in your business ownership endeavours, especially those with in-depth finance knowledge. Avoid being a business owner that is penny-wise and pound-foolish.
Perform Due Diligence
Before deciding to take over a business in Singapore, due diligence should be performed/ carried out.
You are recommended to find out everything you can about the business, from its financial history to reading customer feedbacks and comments on Google. Hire a certified management consultant or corporate advisor to have a second opinion on the business for sale. Lawyers would also be one of the preferred professionals you should reach out, to assist you in dealing with acquisition documentation and agreements.
Compliance with Legal Requirements
Always check and obtain the specific licenses and permits to conduct business, depending on the company's nature and location. If the existing business is fully operational and has all necessary legal documentation, do not assume that it is transferrable. Perform calls and checks with the relevant authorities to ensure that the licenses and permit ownership are transferrable after taking over the business.
Purchase and Sale Agreement
It's time to finalize the transaction with a sales and purchase agreement. Various papers are required to complete the transaction between the seller and buyer of the business (which include the critical sales and purchase agreement). When creating this document, work collaboratively with a lawyer and have them evaluate the terms and conditions with you before penning your signature. An ironclad agreement is recommended. Alike many before you and many after, avoid planting nightmare scenarios ahead of you just because you refuse to pay for professional fees.
Lastly, keep an open mind and accepting the possibility of failure when starting a business is essential. There are no shortcuts to achieving success. Running a business will require you to devote a significant amount of time to identify your niche. Consider all of your options carefully and consider speaking with several different business owners simultaneously to get a sense of the market.