If you’ve ever bought a house, you know that up-front costs are only half the battle. Even when the math looks good on the surface – you have the down payment, and even know what you will pay in land transfer tax – the closing costs often come as a surprise. Lawyer’s fees, moving costs, new furniture, painting, and dozens of other new expenses you didn’t even think of can end up sinking you.
The same principles apply when buying a business. It’s the costs you don’t plan for that will hurt you the most. While some costs are evident (i.e. lawyer’s fees) and others can creep up on you unawares (i.e. PST on used equipment in an asset purchase), it is most often the daily working capital needed to run a business that determines whether a company sinks or swims.
Many buyers purchase a business with barely enough money for the down payment. Don’t fall in to that trap. Work with your business advisor to ensure you fully understand the cash flow of the business, and know what you will need to run the business successfully going forward.
In the meantime, if you would like more information on buying a business, contact us at 204-478-7266×110.