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Tips for Entrepreneurs Buying a Business for the First Time

Posted on in Business Law

Arlington Heights business transaction attorneysAre you thinking about buying a business? Being a business owner can be an incredibly rewarding and exciting career. However, the decision to buy a business is not something to take lightly. So, where does a person start when embarking on a new business venture? The first step for anyone considering purchasing a business or franchise should be to thoroughly research his or her different options. Guidance from a qualified Illinois business law attorney can be a tremendous asset during each part of the business buying process. As you consider your options for investing in a business, make sure to keep the following things in mind.

Independent Businesses Versus Franchise Locations

You will need to decide whether to purchase an already-existing location of a franchised company or an independent private business. There are benefits and disadvantages to both options. The decision about what type of business to buy will depend on what your personal aspirations and business objectives are. You should also consider what your professional strengths are, as well as your weaknesses.

Buying into a franchise can be prefect for those who wish to have direction, guidance, and training provided by the parent company. However, buying an existing franchise location also requires you to relinquish some decision-making power over your business and pay franchise royalties or fees. An independent, standalone business gives you more autonomy and direct control, but also comes without a proven operationals model or training from a parent company. 

Carefully Examine the History and Current Circumstances of a Business Before Investing

Even if a business looks to be thriving and successful on the outside, only a critical analysis of company‚Äôs recent history and its finances can really tell you if this business is right for you. If you are considering a franchise, do thorough research regarding the parent brand, the potential franchise location, and other possible locations or competitors in the area in which you wish to operate. If you are considering purchasing an independent business, be sure to look at profit and loss statements, inventory records, sales records, tax returns, contracts, accounts receivable, accounts payable, leasing agreements, and short- and long-term financial projections. The more you can learn about the business before investing, the greater chance you have of success in the future. Working with a skilled business law attorney can help you avoid pitfalls and make the best decision possible about a wide range of business concerns. 

Contact a Chicago, Illinois Business Law Attorney 

To learn more about buying a business, contact an experienced Arlington Heights business lawyer. Call 847-749-4182 to schedule a consultation with the knowledgeable professionals at A. Traub & Associates today.

 

Sources: 

https://www.forbes.com/sites/jaredhecht/2019/02/27/the-pros-and-cons-of-buying-a-franchise/

https://www.sba.gov/blogs/tips-buying-existing-small-business-or-franchise

https://www.entrepreneur.com/article/249944

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