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Buying A Business Checklist

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There's no denying it – buying a business creates a real buzz of excitement. The key is to make sure this keenness doesn't cloud your judgement and leave you with a business you don't want, or don't know the full history of. Here are some tips to keep in mind for when you're planning on making a big splash to make sure it's one that you don't regret!

Make Sure You Love the Business You Want

The first point sounds obvious, but don't just buy a business because it's a good deal. To turn a business into a real success story, you have to be passionate about what they do, or the way they do it. If you're passionate about the job, and it can use your skills, the battle is already half won, so be certain it's something you can be excited by before you sign any legal documents.

Be Thorough in Your Checks

When checking on the general health of a business you're interested in, it's tempting just to look at the financial statements and chat to the current owner, but this can hide an awful lot of vital information. You want to get a real understanding of everything about the business – its reputation, market and customers. You want to find out about its employees, debts and competitors. In short, you need to know everything about the business – information that legal documents alone won't be able to fill you in on.

Find Out Why They Are Selling

Sure, it may just be that the owner is retiring or they're bored of the business, but are you certain that's the reason? You want a full explanation – if they're trying to get shot of the business, then you might be thinking the same thing a week after purchasing! Do a little detective work and figure out what the deal is. There's every chance you'll still want to go ahead with the purchase, but forearmed is forewarned. If their reason for selling is a big issue you could knock a substantial amount off of the asking price, leaving you with a better deal when the time comes to sign the legal documents transferring ownership.

Get a Good Business Contract

It's a common misconception that the only important thing to consider in a contract is the price you're paying for the company – the truth is that there's a lot more to it than that, and a bad business contract could really hamper your new purchase's chance of success over the coming years. Make sure your business contract is reasonable in terms of payment scheme, debt encumbrance and intellectual property rights, amongst other things. If these terms go over your head, be sure to hire a solicitor familiar with business purchase law to make sure the contract is sound.

Don't Get Ripped Off

In the spur of the moment, and imagining the competition, it's quite easy to end up overpaying for the business you're targeting. Usually businesses have two pricing models: base (revenue or profit) and a multiplier. It's a really good idea to get a professional evaluation of the company to ensure you don't end up overpaying, before you sign any legal documents.

It goes without saying that signing that business contract and buying a company is a big decision, and there's plenty to go wrong. There's plenty to go right as well of course – especially from an informed, well planned and executed sale. If you follow these tips, you're more likely to be celebrating the latter, rather than bemoaning the former.

Buying A Business Checklist

So what should you look for when you buy or generate your own business leads?

I have the following shortlist:

1 - A Lead is not a lead until it's raised its hand and requested information.

Too often companies that sell these targeted leads are merely just selling you names, emails etc that they have got off a disc from one of the big directory companies such as 192.com. They have not been marketed to about what you have to sell and have not expressed an interest in buying that product. Unfortunately there are too many companies that sell this type of data that turns out not to even raise a sale if you buy it.

2 - The business lead should have already bought something related to what you are selling.

This point is crucial. If your lead has already bought a related product or service then it is highly likely that they will be happy to hear about and possibly buy your product. There are very few companies that actually sell this data. The best way to get access to this type of data is to list a number of related businesses to your product and then approach then to see if they would let you contact their database and via versa. By doing this you are achieving a couple of very valuable things. Firstly you are adding value to your business be accessing for little or no cost a whole group of new business leads and secondly you are forming a good relationship with another business that you can later promote your products together in bundles or specials.

I use this method time and time again to gain access to more business leads and it is highly profitable and always delivers a consistent stream of more business leads.

3 - Always ensure that the business lead is fresh

Too often data sold is months or years old. If someone signed up for an offer on a home improvement website 12 months ago it is likely that they have now completed all the work they wish to do, so if you buy the lead and want to sell your home improvement loans then it is unlikely you will get any new leads.

Timing is crucial in converting prospects to leads and leads to sale. The fresher the data the greater the chance that it will convert into a business lead. Always check the sell by date of a list as to when it was last sold to or communicated with, this will also help you by not wasting money on a dead list.

4 - Cheap business leads are just that cheap!

Be warned if it's to good to be true, then it's likely it is. If you get approached to buy leads for $1 a time that are apparently highly targeted and ready to buy, walk away. In my experience the minimum cost of a quality lead starts at $10+. Anything less that this means that the data is poor and probably has been scrapped from someone or somewhere and will not deliver you more business leads.

Always ask for references before buying any data. Any reputable company will be able to put you in touch with satisfied customers of theirs to confirm how good the data is. If they can't then it is likely the data is poor and won't produce you any more leads.

5 - Ask how they develop the business leads

Ask the company what methods they use to generate the leads they sell to you. Do they use websites, telemarketing, advertising, competitions etc? By knowing how they generate the data will help you get a better idea of how to approach the business lead to get the best possible result. If for example they have been generated online, then contacting them via email would be best as they are used to that medium.

All in all if you are looking to generate more business leads then you need to use common sense and stick by the points I outlined in this article. If you do then your lead generation will be successful and you will get more business leads into your business. So don't take any chances with the data or leads you are buying. Ask the right questions to get the answers you want, if the lead company can't deliver or answer what you want then approach another one as there are thousands of business lead companies out there.

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About Author

Both Iain Mackintosh & Mark Vurnum are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Iain Mackintosh has sinced written about articles on various topics from SEO Articles, Other Business and Business Loans. Iain Mackintosh is the managing director of Simply-Docs. The firm provides over 1100 UK business documents covering all aspects of business from holiday entitlement to empl. Iain Mackintosh's top article generates over 9900 views. Bookmark Iain Mackintosh to your Favourites.

Mark Vurnum has sinced written about articles on various topics from Business Loans, Property Guide and Lead Generation. Mark Vurnum is the director of morebusiness leads, a company that specialise in developing a business lead for your business. Visit the more business leads website. Mark Vurnum's top article generates over 6600 views. Bookmark Mark Vurnum to your Favourites.

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