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Buying and selling a business

Acquiring a business without doing appropriate due diligence can have harmful effects in the long run. It is important to understand the different risks before buying a business.

At Hughes & Company, our lawyers will help gather the facts and put in place a strategy to allow you to make a sound decision while considering all relevant factors.

Advantages

Existing Business Concept

When launching a new company, the planning is the main phase you might spend time on. However, when you buy an existing business you will have the office space, equipment or customer base etc.

Costs of Operation

Since you are buying a running business, the operation costs are lower. Additionally, many parts of the business are already in place. As a new owner, you will not have to spend your budget on things such as hiring employees or building clients base.

Financial Performance

Launching a new company has more risks in terms of finances. An existing business has a financial performance that shows how the company was doing in the past. Moreover, you will have data like the company’s position on the market, competitors’ analysis etc.

Intellectual Property

If the business you are going to buy has patents on its products, then intellectual property will probably be transferred to you. It should be said that you buy more than you can actually see.

Disadvantages

Higher Costs

It was mentioned that you save on the operation costs when buying an existing business. Nevertheless, it can come to future purchasing costs. In fact, those costs might be greater than what it would take you to start a business.

Unawareness

The company you are buying was not established by you. It can be a challenge to get familiar with it, especially when you are entering another industry.

Risk

You will go through a process of gathering information about the business and the current owner. It does not matter how much you will find out, there is a risk of a hidden problem. For example, some parts of equipment can be damaged or there is a bad brand awareness.

However, there may be various reasons for wanting to sell your business. For example, you may no longer have the desire to continue running once it has matured or you may simply need the money for other purposes. Regardless of the motivation, the team at Hughes & Company will take you through the appropriate steps in selling your business.

Hughes and Company has satellite offices throughout the Lower Mainland and Fraser Valley. Our team of lawyers is ready to meet you at the location of your choice.