More Than 40 Years Of Legal Service To The Baton Rouge Region
More Than 40 Years Of Legal Service To The Baton Rouge Region

Entrepreneurs should contemplate buying existing businesses

On Behalf of | May 14, 2019 | Buying Or Selling A Business |

Buying an existing business may be the best way for entrepreneurs in Louisiana to get a timely return on their investment. This is because most of the hard work as it relates to getting a company off the ground has already been completed. Typically, an established business already has a recognizable brand, key employees in place and a track record of financial success.

In many cases, entrepreneurs will need to use their own money to bootstrap a startup. However, there may be no need to spend anything to buy an existing company. This is because the current owner of the business may allow payment to be made in monthly installments. The payments are made using a percentage of the company’s profits during the previous month. Buying more than 50% of the company’s stock could also be an inexpensive way to acquire its assets.

As the majority shareholder, decisions can be made about equipment and other assets without the approval of other shareholders. It is important to know that successful businesses are on the market on a regular basis. At some point, their current owners want to retire, wish to move on to another challenge or simply don’t want the stress of managing a large company. Doing due diligence can shed more light on why a business is up for sale and if it makes sense to buy.

When buying or selling a business, it is important to get as much information as possible about the deal. Conducting due diligence makes it easier to feel confident that an individual has gotten the best possible deal. Once a transaction becomes final, a new owner is generally liable for all debts or other problems the brand has. An attorney may help with the due diligence process.