This is the third part in The 12 Days of Buying a Business. This is a multi-post series covering 12 business tips in combination with a vlog. If you missed the earlier parts in this series, you can find business tips 1-3 here and tips 4-6 here.
A big benefit when buying an existing business is the track record that comes with it. This will help guide your planning as you create your budget and build your professional support team. Today I will be covering tips 7, 8 & 9 to help in the initial planning of your business.
Buying a Business Tip 7: You need to get paid.
When creating the budget for your new business, you need to factor in a salary for yourself to live on. Make sure that the numbers provided by the seller include a salary, or enough profit for one, so you get an accurate picture of what you are buying.
While you may be eager to work endless hours for little pay while building your dream of self-employment, you need to face the reality that you do in fact need to live. It costs money to live, so the business you are buying needs to be able to pay you a living wage in order for you to be able to show up to work (unless you are independently wealthy of course).
Tip 8: Surround yourself with professional support.
This is not just a shameless pitch – it is important.
Early on, you should get dialed in with a good CPA (Certified Public Accountant) who you trust. They will guide you on all tax matters. Additionally, it’s important to have competent legal counsel at your side. Lastly, to round out your professional support team, it’s always wise to have a good insurance broker to make sure you are protected in case of a claim.
Above all, the greatest takeaway from this tip is to take the time to familiarize yourself with professionals who care about your success.
Tip 9: Plan ahead so you can hit the ground running.
If you are considering buying a business, it’s time to start the process now. There is a lot of work to be done, and work takes time. Use the time that you have between looking for a business and the closing of the transaction to get your ducks in a row for when you take the reins on the business.
Here are a few things that you will want to set up prior to your first day of operation:
- – Forming the company. The company itself can take at least a week for the Secretary of State to process and provide a Unified Business Identifier (“UBI”). The UBI will be needed for most other accounts within the state of Washington.
- – Business bank accounts. This can take at least a couple weeks to get the account set up, and checks and debit cards delivered. You will want this in place soon after starting your business, so that you can run your expenses properly through the business accounts.
- – Employment security. This can take several weeks to set up and is needed to process payroll.
- – Websites and social media. Websites take time – much more than you will think. Get started now.
- – Email and phone services. If you are setting up a new company with a new brand, having an email address that includes the domain name of the business (for example, email@example.com instead of firstname.lastname@example.org) sends a message to your clients that you are organized and a real business. Setting these up is time consuming and can likely be done well in advance of buying your business.
- – And so many more… including payroll services, CPA, attorneys, labor and industries, licensing, etc.
For more detail on these business tips, watch my vlog below!
As always, if you have questions on buying a business or starting your own business, please feel free to give our office a call. Wherever you are in the process, we are here to help you navigate and understand what goes into this type of business transaction. Also, these tips are for general guidance. A strong, safe business transaction should include the review of any documentation by an attorney. Give us a call today to schedule a review.
Halverson Law specializes in Business Law and provide expertise and representation on both transaction and trial work. Negotiating strong contracts and crafting practical legal strategies — it’s what we do. We’re ready to help wherever you are in the process of buying or starting a business, and we’re looking forward to helping you have a good and safe transaction.