CONSIDERING BUYING A BUSINESS?
You have probably heard time and time again that owning a business is the "American Dream." From a statistical perspective it is also an American reality. According to a recent study, more businesses are owned in the United States on a per capita basis than any other industrialized nation in the world.
There are two ways this is done. One is to start your own business from the ground up. The second is to acquire one from someone else. The purpose here is to provide an overview of this second option: buying a business. Note that it is intended as an "overview," not a complete discourse. Entire books, libraries of them, have been written on the subject. In fact, full careers exist solely to provide guidance and assistance in buying businesses. So this report should serve as more of an outline--a starting point.
Buying a business may be one of the largest investments you will ever make in your life, both from a dollar standpoint and a time standpoint. Running a business usually takes up more of your waking hours than anything else, so the time factor may be even more important that the money spent.
Therefore, the consideration of buying a business should involve several issues: weighing the advantages / disadvantages of buying; understanding that eventually the asking price of a business is not an exact science; deciding what questions you should ask the seller; and determining the best way to structure the purchase from a tax perspective.
Weighing The Advantages And Disadvantages Of Buying A Business
Buying a business instead of starting one "from scratch" has its strenghts and weaknesses. To summarze them:
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