The service industry is a booming industry with lots of opportunities. If you’re thinking about purchasing a service business, there are some things you should consider. The following blog post contains five considerations to have when purchasing a service business.
The first thing to consider is financial records. Before purchasing a business, check the records to be sure profits are positive. Good financial records will prove that a business is operating in the green. If a business doesn’t have their tax returns, balance sheets, or receipts, you may not want to buy this company.
The next consideration to have when buying a service business is the non-compete agreement. Service businesses have non-compete agreements to protect themselves. If you purchase a business from an individual who intends to open a similar service business, they have the potential to take customers from the company you bought. Before making the investment, make sure there is a non-compete agreement in place.
Training periods should be taken into consideration when purchasing a service business. Think about the time it will take you and your employees to get a hang of the new business. For most, two weeks it the average training period. Your business can’t operate until you and your staff are confident and comfortable, so think about the financial costs related to training periods before making a purchase.
As mentioned previously, competition is a big part of the service industry. Before you buy a business, check out the company’s competition. Look for similar service businesses in the area to see how yours stands up. Think about what your company can offer that others don’t. If you aren’t sure your company can compete with others, think about investing in a different business.
Finally, have a business plan set up for your service company. A well-written business plan can help you experience success. Include business loans, purchase prices, and so on in your business plan for the most well-thought-out approach.
Need help buying a service business? If so, contact Hallmark Business Brokers! We can help you move through the buying or selling process with ease, so reach out by phone at 941-445-4726 today!