Buying an existing business can minimize many headaches that will come in the early stages of a start-up. Due to the economic effects of COVID-19, some business owners are looking to cut their losses and exit their business entirely. Therefore, there are many opportunities for new business owners. However, there are some significant factors that you should consider before buying a small business in British Columbia, Canada.
Questions to Ask When Buying a Small Business in Vancouver, Canada
Many factors play into the business buying process. Consider the following questions to ensure that you are prepared.
What Do You Know About the Industry?
Market research is the crucial first step when analyzing a business for purchase. Conducting due diligence will provide insight into aspects of the business you may not have considered. For example, Is this industry showing signs of recovery in a post-COVID world? Or is there a trend in technology that will potentially benefit or harm the industry five years down the road? The healthcare industry is a great example; it currently operates in a telemedicine format that did not seem possible before the pandemic. Nobody can predict the future, but a long-term analysis of what the industry is trending towards will only give you an advantage in your search.
Do You Have a Proper Valuation of the Business?
Many small business owners have an emotional attachment to their business, which will make it difficult for them to give an accurate estimate of value. The best way to avoid this bias is by bringing in a third-party to provide a proper valuation. This will provide you an unbiased assessment of everything from the business structure to the physical real estate that comes with the purchase.
Do You Have a Plan for Post-Purchase Transition?
Do you expect the current customer base to stay intact? Are there opportunities to enter niches that the previous owner did not? Will the business structure falter after losing the current owner’s leadership? If the answers to these questions are unknown, you may need to raise a red flag and reevaluate that particular opportunity. Even if you are purchasing an already successful business, there should be evident opportunities for growth. For example, are there ways to utilize social media that the previous owner did not consider? Perhaps creating a webinar format to reach new audiences will benefit your new business. This is where the entrepreneurial side of buying an existing business will come into play.
Buying a Business 101 in British Columbia
Have you begun prospecting existing Canadian businesses? Considering these questions early in the process will allow you to enter the industry with a well-grounded business plan. But, the road to entrepreneurship is a challenging one, and without the proper business planning, it’ll be hard to get what you want out of the transaction.
Pacific M&A and Business Brokers is a relationship-driven brokerage group dedicated to helping you achieve your entrepreneurial goals – and we understand that starts at the very beginning. Our advisors are ready to embark on one of the biggest journeys of your life with you. Start searching for local business opportunities in Vancouver, Surrey, and other parts of the Lower Mainland today! Contact us for help in landing your own business.