Mistakes to avoid when buying your own business
When you buy an existing business, it’s easy to assume that a lot of the hard work has already been done. You usually have a location and systems already in place, and you’ve bypassed many of the problems entrepreneurs face during the start-up phase.
However, there are still plenty of things that can go wrong. From a lack of research to personal liability, here are three common mistakes to avoid when buying your own business.
Mistake #1: Not doing enough research
Buying a business is a huge decision. It has the potential to either improve or damage your financial wellbeing, so it’s crucial to do thorough research before making any commitments. You should understand why the business is actually being sold, and insist to see the seller’s books to know whether there are any outstanding loans or debts.
Mistake #2: Putting no effort into marketing and advertising
When you buy an existing business, you might think it’s already well established. Marketing might not be high on your priority list, but many small businesses suffer from insufficient promotional efforts.
To save yourself from the same fate, ensure that you have a strong marketing strategy in place right from the beginning.
Mistake #3: Exposing yourself to potential legal problems
One of the simplest and most crucial mistakes that a business owner can make is signing legal contracts in their own name – not their business’ name. This opens you up to a host of potential liabilities and legal problems in the future. To avoid this, seek professional advice about creating a limited liability company.
How we can help
If you decide to buy a business, you’ll also need to make sure you get your bookkeeping right from day one. At Scorpion Bookkeeping, we can help you to implement Xero bookkeeping software so you can do that. We are a Xero-certified partner.
We can also provide your business with cost-effective bookkeeping support services. We service a diverse range of clients in South Australia, Victoria and New South Wales.
Contact us today for a free, no-obligation consultation to find out how we can help!