This article are provided for information purposes only, and are not intended as legal advice.


Buying a business, when is the best time of year?

June 23rd, 2009

When you buy a business, there are two different items to think about, when to start looking for the business and when to close the business. The most obvious time to close if just before the major revenue and profitablity starts.  For example, a retail store will do well from the fall until December 31, then in January they get lots of returns and January and February are often very quiet. From a vendor point of view, closing the transaction after they got the peak business in January is the best time to close.  From the buyer’s point of view, September is the best time to buy.  Other businesses may have different cycles, for example manufacturing plants may have shut down periods in the summer or around Christmas which means there may not be any revenue for a few weeks.  Who is covering the overhead during that time, you don’t want to buy and find out that the day after you closed the business everyone is on holidays and now you are about to pay for a major annual equipment tune up.  In Europe, many businesses close for August.  Not a good time to close a purchase of a business during this month.

 

It is rare that you will be able to close at the peak time however if you plan correctly, you should be able to get as close as possible.

 

Remember, you cannot find a business and close in a day.  From the time that you find a business, it takes on average 2 weeks to close the deal, I have seen as fast as two weeks but typically 1 to 2 months. You need to agree to a letter of intent, then time for due diligence, then for the lawyers to prepare the purchase and sales agreement.  It takes time to find the right business, up to a year therefore you can’t work backwards and say, I want find the right business to buy and close the deal in 2 months.  Odds are against you to find and close in that time period but never say never, unusual  things have happened before.


Filed under: Business strategies — Gary Landa @ 8:18 am


1 Comment »


  1. Within the current economic scenario, you will find franchises doing business everywhere. It is only natural to become attracted by the huge business potential. With so many options out there, spotting and buying the right franchise business can be quite difficult.
    So what makes the right business franchise opportunity? While it is important to pick a brand that has wide visibility and is a pioneer in its field, it is equally crucial to put your money into something that matches your skill level, fits with your lifestyle, and rightly complements your business goals.

    Comment by Franchise Business Opportunities — June 30, 2009 @ 12:37 am


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