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


When is the best time to buy a business?

May 27th, 2009

Any time you can find the right business for you is the best time to buy a business.  However, you can differentiate buying a business and closing the transaction.  It takes time to find your business, prepare the letter of intent, due the due diligence and then prepare the legal expenses.  Certain businesses are cyclical and have poor sales in certain months. 

 

For example, the retail industry does well in the fall and through December, January and February sales are down significantly and many items are returned in January.  Do you want to buy a business and close the purchase transaction in the slowest month?  Depending on the business, other months  of the year could be poor as well.  If you are in a resort town and have a business, summer is peak time of business, you would not want to close in the fall because you could have 6 months of poor or no revenue.

 

Ideally you want to purchase a business just before it gets into the peak seas0n so you can take advantage of the revenue and profits in the best months of the year. Conversely, the seller of the business wants to close after his busiest months of the year so that he can keep the profits of the business.


Filed under: Buy a business — Gary Landa @ 12:10 pm


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