Thinking of Selling or Buying a Business after the Holiday season?

Thinking of Selling or Buying a Business after the Holiday season?

The ‘post Christmas’ period is traditionally a time when we are meeting with business owners who have taken some time over the break to think about selling. Sometimes they are ready to go and the business comes on the market straight away. Other times, it’s the beginning of a process and it may be several months or years before the business owners are ready to make the move.

On the other hand, if you’re looking to buy a business, it’s a good time for a serious self-assessment. Banks rarely lend money against businesses without the borrower putting up real estate security and banks also expect you to put some cash in too. So sit down and make a realistic list of your assets….. AND your liabilities!

It’s all very well for your house to be worth $700,000 but if you have a $300,000 mortgage your equity (the part you can borrow against) is $400,000. Importantly, be realistic with values. If similar houses around you have sold for $550,000 to $600,000, you house probably isn’t worth $1,000,000!!

Doing this exercise will be a key to understanding your financial ability to buy a business and more importantly will save wasting a lot time when you start the search for a business.