What you need to consider before you buy a business

Not every entrepreneur wants to manage a start-up. Buying an existing enterprise means carefully planning and thinking about a few key issues before you take the step to get a loan for business.

Like every other decision you make around any kind of enterprise, you need to avoid the pratfalls. Here’s just a few of the ones that are most common.

It’s a good idea to avoid buying a business just because you can. If you’re like a lot of entrepreneurs you think almost exclusively in terms of what you can afford to do and what you can’t, but there’s a larger picture when you’ve decided to buy an existing enterprise. A SWOT analysis is a good starting point to gauge any possible disruption. It will tell you about a prospect’s current situation and if pursuing small business funding to add on an acquisition is well timed.

Cash Flow

  You need to keep in mind buying a business can change your cash flow in the short run. There are also operational and financial changes that need to be considered carefully before you sign on any dotted lines.


If the company that you are considering buying is drastically different from anything you’re accustomed to, you’ll need to do even more homework. Finding out about the history behind it as well as the employees and the industry that it’s currently in are invaluable to seeing if there’s a match with your existing operational model.

Business funding and marketing

Before you take those final steps and sign on to get that loan for business, check into the marketing and sales strategy of the firm that you’re thinking about buying. Of course it should have a proven track record of revenue growth. You’ll also want to look into the operational model to look for best practices to deliver goods and services to see what can stay and what needs to be changed.