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Are you ready to buy a small business

folder30394905.jpg When you are ready to invest some money into small businesses do you know what type of business is out there to make you money? There are a number of small business options to choose from that finding the right one for your money can be a bit of a challenge. Some people will invest in a business that is already up and running while others prefer to look for businesses that they can start up on their own. While everyone's preferences are different, there are numerous advantages to buying a small business.

The truth about starting your own business is that it can take at least 3 years before you know it's going to survive and be successful. Since starting a small business can be such a high risk, buying one that is already stable is the best option. Here are the main advantages to expect when you are buying a business versus starting one:

  • The business already has been established and has an income. All you need to do is bring in your expertise and experience to help bring more success to the business.

  • You don't need to worry about "down time" as the company already has a monthly cash flow. This means you won't have months where you focus on attracting customers and struggling to get the business going.

  • Many buyers are able to get the seller to finance some of the purchase price. This makes the investment less expensive on your end.

Since we know the business is a success, now comes the hard part of figuring out the operating of the business you have purchased. The financial aspect of running a business is enough to make many people run away. You need to know so many different things about running a business that it will make you look back over your own skills and abilities to run the business. Are you truly motivated and qualified to run a small business? This is an enormous undertaking and it requires only the best and most devoted individuals to make the business run correctly.

Small business owners need to learn how to manage the books correctly as they will be the person in charge of payroll, account receivables, and accounts payables. One of the things you need to do is to purchase a good software program like Quickbooks or you need to learn the one the company is already running. Most of the financial software programs do come with training courses you can take online in order to be sure you completely understand it.

Not only do you need to learn about the books, you have to learn about small business taxes. Each state has different tax laws and rules but the Federal rules are all the same so any CPA will be able to help you out here. Some of the things you need to look at are the deductions you will be able to take along with other things like payroll taxes and quarterly taxes. It is vital that you pay these taxes correctly or you will be penalized by the IRS.

How are you planning to pay for the business you are purchasing? Some investors have the money but many others do not. You have to look into several lending options in order to purchase the business correctly to be sure it's actually affordable for you. One way to help reduce the cost comes down to the negotiation process. If you can get the seller to reduce their costs on the business, you can easily make the loan much more affordable for a lender to provide you with.

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