Starting a New Business
Thinking of starting a new business? Where do you start?
We help to build Successful Companies by Developing Successful Strategies using Flexible and Simple Business Plans with step by step guidance.
There are fundamentally two parts to buying an existing business in most cases i.e. the transfer of the business from one party to another, and then the transfer of the property, normally via the lease, but sometimes by acquisition of the property. In some cases ,such as internet based businesses, there are no premises .
We need to identify and agree what type of business you're thinking of getting into and why. Is it a good idea? Is the timing right? What does my business plan look like? How much money will I need? Where from? How long will it take me to break even? Is the business likely to be seasonal?
We also need to try to identify what problems you have or are likely to have along the way.
Whether a new business start up or an existing business needing help we can point you in the right direction with things such as :-
finding the right business solicitor who will talk to you about operating as a sole trader, partnership, or Limited company and explaining the pros and cons of each finding the right accountant for you and tell you what to look for when choosing one credit control, marketing finding suitable business premises, if you need them creating a new, or amending your existing, website to bring you more business and so much more...
• Cash Flow Analysis & Business Valuation
• Cost Control
• Staff Costs
• Profit & Loss Statement Analysis
• Financial Trends
• Personnel & Management Training
Deciding on what business to enter into
South East Business Brokers
98 Gloucester Road
Kingston Upon Thames
Tel : 07825 293006
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South East Business Brokers
The business itself can be either a sole trader, partnership, or limited company.
Sole trader or partnership
Limited companies : Buy the shares of a company or the assets ?
If it is a sole trader ,or partnership, then a sales purchase agreement is drawn up to transfer the company from the party/parties involved to another. You need to take advice from a solicitor as to the pros and cons of each trading style.
If it is a limited company, you have the option, in most cases, to buy the assets or alternatively the shares.
There are advantages to both, but some sellers may only want to sell just the assets or will only sell the company to you as a limited company for a number of reasons. You need to take advice from a solicitor when purchasing a business, and one who specialises in business transfers.
However, you also need to be aware that some unscrupulous sellers may use the share sale to transfer liabilities of the business that may not be that attractive, such as issues with the lease. It is therefore important that the proper due diligence is carried out before the acquisition takes place.
The lease itself is essentially the agreement between the landlord and the tenant with regards to the property. There are various ways in which a new tenant can take over the existing lease, and there are advantages and disadvantages to the different methods. It may also be prudent to try to get the landlord to agree to issue a new lease.
However, a landlord can more or less put in the lease whatever he chooses, so it needs to be checked by a solicitor in the first instance to ensure there are no clauses in there that have undesirable implications for you as the lease holder, which might make the lease difficult to transfer at a future date.
Start up or existing business?
Many people think they will save themselves a substantial amount of money by setting up a business from scratch rather than taking over an existing business. Unfortunately, there are so many things that can go wrong, this is not always the case.
At least with an existing business, you usually have a track record, in terms of the annual accounts, so you can get a feel for what your costs, and profit are likely to be. Yes, you will be expected to pay for the goodwill of the business, but it is relatively easy in most circumstances to see how long it is likely to take you to see a return on your investment.
Bear in mind, with a brand new venture, you have to build the business up from scratch, which may not be as easy as you think.