Buying A Business

How you can buy a business

Here at Cube Law Corporation, we can help you simplify the process in starting your new business, franchising or simply buying out an already existing business. Before buying or starting a new business, consider these few things first:

• Assess your investment: Evaluate your financial situation and determine the amount you are willing to spend on acquiring and managing the business. This assessment will help you narrow down your options and identify businesses or brands that fit your budget.
• Evaluate your abilities and lifestyle: Conduct an honest appraisal of your skills and experience as they can help you eliminate unrealistic business opportunities. For instance, if you prefer a hands-on approach, franchising may be the best fit. Conversely, if you have prior business ownership experience, acquiring an existing business may be the right move.
• Examine the entire landscape: Scrutinize the current infrastructure and ensure you comprehend all the components that accompany the purchase. Don’t hesitate to ask questions about contracts, leases, existing cash flow, and inventory. The more information you have, the more prepared you will be to make a wise decision.

Helping You Decide

When deciding between buying a business or franchising, it’s crucial to carefully evaluate each opportunity. To do this, you must conduct extensive research to understand the business’s financial standing and the market as a whole. If you’re interested in franchising, obtain a Uniform Franchise Offering Circular to learn about the franchise’s legal, financial, and personnel history, as well as their rules and regulations. Additionally, ensure that the franchisor provides training and support in marketing and advertising. For those interested in buying an existing business, check licenses, permits, zoning requirements, and environmental regulations in the area, and determine the fair price using various methods such as the capitalized earning approach or the value of specific intangible assets method.

When you’ve found a suitable franchise or business to buy, it’s important to conduct a thorough, objective investigation, which may require professional assistance from an attorney and accountant. A franchise law specialist can help you evaluate the franchise package and tax considerations, while an accountant can assist with determining the full costs of purchasing and operating the business, as well as potential profit. Together, they can help create and evaluate important documents, such as the letter of intent, confidentiality agreement, contracts and leases, financial statements, tax returns, sales agreement, and purchase price adjustment.