An Overview of How to Buy a Business

One of the best ways to start your path down entrepreneurship is to buy an existing business. There are many benefits that you will instantly receive from the purchase of a company. Primarily, in all likeliness, the business you intend to purchase is currently generating a profit and maintaining a positive cash flow. As such, the concerns regarding your ability to support yourself from the income derived from your business are substantially reduced. Additionally, you can use the existing business as a platform that you can aggressively expand. Unlike starting a new business, an existing business already has an operating history, a customer base, and an established market presence.

According to many experts, you should purchase a business that suits your industry experience and expertise. For instance, if you have had years of experience working in a retail store then it may not be in your best interest to purchase an established restaurant. The best business ownership transitions usually occur among individuals that already know how to operate the business they intend to purchase.

Once you have decided to purchase a business then you must begin the process of finding a suitable acquisition target. In any market, there are always a number of business brokers that can assist you in locating businesses that are for sale. There are also a number of websites that specialize in listing businesses for sale. These websites are similar to those that list properties that are on the market.

You are also going to need to determine how much capital you intend to contribute to the business acquisition as well as how much money you can potentially borrow to finalize the acquisition. It is important to note that among small business sales, the original owner will usually provide the buyer with a promissory note for 20% to 50% of the value of the business. If the business seller is able to do this then you will find it is much easier to receive additional third party capital if it is required.

Next, after you have found the business you want to purchase, it is time to go through the due diligence period. Here, you will need to examine every aspect of the business that you intend to purchase. Foremost, you should examine the last three years of tax returns from the company. Your certified public accountant should also thoroughly review all of the financial documents that will be provided to you from the current owner. You are also going to want to have a formal valuation completed by an expert. In many instances, the current owner of the business has already had a third party valuation completed that you can review with your CPA.

Additionally, you are going to want to speak with the employees of the business as well as frequent customers. This will provide you with a much greater understanding of how the business has been run and whether or not customers are satisfied with the services offered by the business. You should also work with the owner to determine how they will assist you during the three month to six month transition process that will occur after the business is sold. Frequently, the former business owner agrees to assist with the transition for a one year period.

If you have determined that you want to purchase this specific business then it is time to begin negotiating. During this phase of the business acquisition process, you should have your attorney work closely with you. Attorneys are excellent negotiators and they will help you substantially. Usually, the negotiation process takes approximately one month for a small business sale or transfer.

After the price and terms of the sale have been agreed upon, it is time to purchase the business. In this final step, your attorney and the seller’s attorney will review the closing contracts and begin to establish the escrow account. After this step is complete and all documents are signed, you are now the proud owner of an existing, profitable, and working business.

3 Benefits to Using Cloud Yoga Business Software for Your Yoga Studio

A Fictional Tale of Two Yoga Teachers:

Wendy and John are each starting a yoga studio. They have their space, a website, and recently opened for business.

They also chose to administer as much of their business as possible on computers (who doesn’t these days). They each have a laptop so they can be mobile, or so they think. They also have a desktop in their studio.

Students are coming to their classes and they’re delighted by this. Yet, they both desire more students. Their business is in a growth stage.

When not teaching classes and chatting with students, they’re on their computers taking care of the financial aspects, marketing, curriculum / class planning, and overall administration of their business.

When they started, they weren’t sure the direction their business would take so they held off buying any specific business management software. Instead they used Word and Excel to take care of their software needs. So far their software set up is working okay, but they see the writing on the wall how something more sophisticated could save them time.

Wendy and John go online to start looking at yoga business software options. They’re pleased that there’s a lot of options. Of course options mean making a decision.

Wendy decides to go with a cloud computing software platform while John opts for an installation software option.

Wendy’s option requires that she pay a monthly cost to use her software. John likes the fact he only pays one time for the software.

Wendy logs into her software account through the Internet and sets up your software for your business. It takes a few days to get familiar with it, but within a week she has her software working for her with a class schedule set up and she’s put her student contact information into the database. She also set up her autoresponder email account and integrated it with your student contacts.

John installed his software on both his laptop and desktop computer. He opted for no server and instead figured out how to network the two computers together so when a change is made in one computer it’s reflected in the other computer. He spent about a day getting his software installed and networked.

Like Wendy, he takes a few days inputting his student contact information and formatting his class schedule in the scheduling software. His email software is separate, but he’s managed to integrate it using an APP with his installation-based yoga business software.

Fast forward 2 years. Both their yoga businesses are doing better than ever. Each of them hire 2 teachers to teach designated classes and a receptionist. This growth required more computers for their staff. Wendy, simply upgrades here software to add another user. Her staff simply logs into the software through the Internet.

John buys another license and then goes through the installation process. Now he must network another computer. He’s read that using a server is a good idea, but has no idea how to set up a server. Given his business is growing, he decides to hire a networking consultant. After buying a dedicated server and paying networking consultant fees, John spent $1,500. His software also upgraded 6 months ago and so he paid $300 in upgrade fees.

As their businesses grew, both Wendy and John started selling some retail items in their studio and on their website. They also discovered how effective email marketing is to student retention and growing their business. Wendy’s online software platform offered e-commerce, credit card processing, and integrated e-mail marketing software. She was able to set up her stores and beef up her e-mail marketing quickly.

John leased credit card processing hardware, bought a license for e-commerce software and continues to use his original e-mail marketing software that’s integrated with his student contact database.

At this point Wendy’s entire yoga business software is centralized and accessible over the Internet. John uses several software services that are installed and networked among his computers. As John’s business grows, his computing needs become more complex and he now has his networking consultant on speed-dial.

He now budgets annually for computer consultant fees – something he never anticipated. He of course has heard about cloud software and is now interested in making the switch, but is reluctant given the amount he’s invested in his desktop installation software. He’s going to wait and see.

Wendy pays a monthly fee for her service, but is pleased with how easy it is to add new users and grow her business with hardly an interruption in doing her core activities – which is teaching yoga and marketing her business. In fact, Wendy is considering opening another yoga studio knowing aside from finding and designing space, here business is easily duplicated at another location.

John would love to expand to another location, but is concerned about the expense of expanding and managing his business so that all his business information integrates seamlessly between his multiple locations. He puts expansion on hold.

About Cloud Computing Software

What is Cloud Computing Software?

It’s software that’s hosted by the software company. When you sign up, you get an account and all your software is handled on the cloud – that is hosted and powered by the company’s servers – not your servers. You simply access it online.

The biggest reason business owners are reluctant to use cloud computing is the ongoing cost. Most cloud computing software platforms charge monthly to use the service. This ongoing cost is understandably a concern, especially for new businesses. The last thing you want is to be committed to ongoing costs if at all possible avoided.

However, when you look at the long-term of your business, and your software in particular, there’s ease-of-use and expansion to consider. With installation software you must always consider the upgrade costs and potential for paying consultants to maintain and grow your network. These unforeseen costs can be hefty in the long run.
3 Key Benefits to Using Cloud Software for Your Yoga Business Software

1. Access it Anywhere

Because it’s accessible over the Internet, you can access your entire software set up wherever you have an Internet connection (which is pretty much everywhere these days).

2. Integrates it with your Websites

A quality cloud software service for yoga studios makes it easy to update it simultaneously with your websites. For example, when you make changes to your class schedule, those changes are immediately reflected on your website where you post your class schedule. There’s no need to go into your website(s) and manually make the changes (assuming you remember to do this).

Also, if you have e-commerce on your website selling gift certificates, yoga class packages, and perhaps gear and apparel, when you make pricing changes (or any changes) in your software, it’s immediately reflected in your website(s).

3. No installation and networking costs

This is a biggie. Many business owners when starting out with buying software tend to undermine this. With cloud computing you don’t have to worry about installation and networking your software. As you can see from the above Tale of 2 Yoga Teachers, John’s software costs escalated beyond what he anticipated because of unforeseen consultant costs. This is common with specialized business installation software. Networking software among computers is not an easy task and usually requires an expert to do it well.

Will your yoga business fail by not using cloud computing yoga business software? No, but it could make administration and growth more difficult.

Ways Your Business Can Fail

Here, we are going to discuss why businesses fail. This is the most common questions that we receive as we have produced a number of articles pertaining to how to appropriately start a venture. Foremost, most businesses do not work out in the end primarily due to the fact that they should not have been launched in the first place. Essentially, many small business owners did not complete the appropriate diligence that is necessary in order to determine whether or not their venture would be economically viable. As such, we strongly recommend that before you engage in any type of business operation that you complete a full business plan that showcases every aspect of your venture. Most importantly, you need to complete a full demographic analysis regarding your market so that you can be sure that you will receive the necessary traffic that you need to your operation as time progresses. We strongly recommend that you develop a business plan that focuses on the first five years of your operations so that you can completely understand whether or not the market will sustain the type of business that you’re looking to start.

Statistically more than 60% of new business ventures fail. However, while this statistic seems high, it is not primarily due to the failure of the owner. Primarily, a business fails simply because it should not have been launched in the first place within it specific market. This is a special especially true for traditional brick-and-mortar companies. However, some businesses are able to thrive in any economic environment. Popular businesses that are able to sustain themselves whether there is an economic recession or economic prosperity is franchises. As such, and if you are starting out as an entrepreneur, you may want to examine these incidences first so that you can substantially reduce the risks associated with your venture.

Entrepreneurship is not about taking an excessive amount of risk. Rather, entrepreneurship is understanding the risks that you’ll be taking and how to mitigate these issues as you progress through your business operations. We strongly recommend that you review all the potential risks associated with your venture before you even begin to think about launching it. Common risks that should be evaluated include financing risk, market risk, and pending legislation that may impact the way that your company does business. For instance, a very popular line of payday loan businesses has recently undergone a significant amount of change due to legislation changes. As such, as an entrepreneur, it is imperative for you to ensure that any type of market change or legislation change will not impact the way that you do business.

Also, one of the reasons why a number of businesses fail is due to the fact that they are under funded. There are very few businesses that become profitable very quickly. As such, it is imperative for you to have a significant amount of capital on hand so that you can effectively ensure that you will reach profitability for your patch reserves dry up. This is something that we are going to continue to discuss through a number of different articles so that you can be made well aware of how to properly manage your cash flow as it relates to starting a new business venture.

The other common reason why a business fails is that they did not obtain the proper location. Again, for example, a restaurant can serve great food at a great price that can be invisible to the general public to do the fact that they do not have a location that draws a substantial amount of foot traffic. Prior to launching any new venture, you should thoroughly examine the market as a whole also looking at the specific location that you may sign a lease on to launch your new business. According to many statistics, about half of businesses that fail simply did not have a good location.

Another reason why businesses frequently do not work out in the end is that there’s too much competition within the market in order to sustain an economically viable business model. Prior to engaging any type of new business venture, you should always thoroughly examine the competition that you will continue to face as you progress through business operations. This is especially important if you intend to operate a local business venture that potentially has a number of competitors that offer services that are similar or identical to those of your own. As such, you should always complete a thorough competitive analysis within your business plan and within your business proposal documents so you can understand exactly how you intend to retain a competitive advantage over other individuals. One of things that entrepreneurs often make the mistake about it is that they feel that they are going to be the only competitor within their respective market. However, this is rarely the case. Though only a few times in which an individual business is the only company that provides a specific product or service that is demanded within any specific type of market. As such, you should always list the strengths, weaknesses, opportunities, and threats are associated with operating a business in your local market.

Finally, this is simply an overview as to why businesses fail. We will continue to provide you with a significant amount of additional information in regards to this matter so that you can further understand how to evaluate any specific business opportunity that you’re potentially going to develop.