Ever bought a house? The math looks good – you have the down payment, you even know what
you will pay in land transfer tax, so you’re good, right? Not by a long shot. The closing costs can
kill you – lawyer’s fees, moving costs, new furniture, painting, and dozens of other new
expenses you didn’t even think of!
It’s the same when you buy a business. The costs you don’t know about will be the ones that
might kill the deal. Some costs are evident (lawyer’s fees), but others can creep up on you
unawares (PST on used equipment, for example). But the real killer can be just the daily
working capital you will need to run the business. Many buyers buy a business with barely
enough money for the down payment. Don’t fall into that trap – make sure you understand the
monthly cash flow of the business and what you will need to run the business going forward.
Where will the money come from to make the first payroll? What about suppliers? The rent?
Make sure you understand how much cash you need to run the company on a daily basis.
Need more information? Call us at 204-478-7266, ext. 110. or click
https://www.bealbusinessbrokers.ca/buying-a-business/ to download our free e-book on
buying a business.