Key Things to Know About a Business in Charlotte, NC Before You Buy

business buyers meeting with sellers

Becoming a new business owner is exciting, but don’t blindly accept the terms of a transaction with a rush of enthusiasm. Before committing to any purchase agreement, you’ll want to thoroughly analyze the business you’re hoping to buy, its green and red flags included. That way, you can step into your new venture with open eyes and knowledge of what will push you forward and what may set you back.

Below you’ll find a list of key things to know about a business in Charlotte, NC before you buy it.

5 Factors to Consider Before Buying a Charlotte, NC Business

Here are five factors you’ll want to consider before purchasing an existing business.

1. Why the Business is for Sale

You’ll want to find out why the current owner is letting go of their company. Is business bad, or are they just retiring? Whatever the reason, you’ll want to make sure it’s one that won’t interfere with your business plan and the company’s growth and success once you take over. If the seller is truthful about why they’re selling, that’s a good sign that they’ll be transparent throughout the rest of the selling process.

If they’re not upfront and honest, you should take that as a warning sign to proceed cautiously throughout the selling process. You probably want to reconsider if you will become involved with them in a business deal.

2. The Value of the Business

Business valuations can help determine if a seller has offered you a fair purchase price. There are various ways to value a business, including asset-based, income-based, and market valuation. A business broker can help you calculate an accurate valuation to determine the company’s net financial worth.

3. Legal Documents

Don’t be afraid to ask the current business owner for access to any documents you may want to review. Whether it’s leasing agreements, copyrights, or financial statements, no request is too big or small compared to the investment that you are about to make. Financial records like cash flow statements and balance sheets detailing business assets (like receivables), liabilities, equities, and tax returns are especially important. You’ll also want to verify that the business has a certificate of good standing, proving that it’s properly registered with the state it resides in and has paid all of its fees.

4. Existing Customers

Having an existing customer base is a big plus of buying an established business because it gives you a place in the industry and demonstrates a proven market. However, you’ll still want to find out how strong the company’s customer base is and if it will remain strong under a new owner, especially if there are any customer-seller ties with the previous owner. In general, it’s a good idea to obtain and review a copy of the company’s customer lists. You may also want to check the business’s current reputation among its customers by looking at reviews.

5. Existing Employees

Who are the business’s key employees? Employees that put forth hard work and have experience with daily business operations add a lot of value to the company. You’ll want to find out if they’re likely to stick around after a change in ownership and what their positions, duties, wages, and benefits are.

There are many more factors besides these five that you’ll want to consider before you make a business purchase. If you’re ready to buy a business in Charlotte, North Carolina, the business brokers at VR Business Brokers of Charlotte can help you save the time and stress of reviewing all of these factors yourself. Contact one of our experts today!

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