Thinking of buying a firm but not sure where to start? That question is being contemplated more and more every day with more mergers, acquisitions and consolidation taking place across the accounting and wealth management industry today.

There are some key things to consider and to look for when seeking a purchase of another firm or a merger of businesses.

The Steps to Starting

There are many types of businesses to buy. Take these steps to narrow down the list of potential businesses you may want to purchase.

• Identify Your Interests : If you have absolutely no idea what business you want to invest in, first eliminate businesses that are of no interest to you.
• Consider Your Talents : Being honest about your skills and experience can help you eliminate unrealistic business ventures.
• List Conditions for Your Business : Consider if a business has a condition that is unfavorable to you, such as location and time commitment.
• Quantify Your Investment : Finding profitable businesses for sale at reasonable prices can be difficult. Ask yourself why this business is for sale in the first place.

Advantages to Choosing an Existing Business

There are many favorable aspects to buying an existing business such as drastic reduction in startup costs. You may be able to jump start your cash flow immediately because of existing inventory and receivables.

Disadvantages to Choosing an Existing Business

There are also some downsides to buying an existing business. Purchasing cost may be much higher than the cost of starting a new business because of the initial business concept, customer base, brand and other fundamental work that has already been done. Also, be aware of hidden problems associated with the business like debts the business is owed that you may not be able to collect.

If you have decided to buy an existing business, you will want to be sure you are making the right choice in your new venture. Only you can determine the right business for your needs; however, the following topics can help guide you make the best decision.