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In-depth advice for potential business buyers.
With a shrinking employment market, owning a business may be a legitimate path for those seeking new opportunity. While starting a business is an option for some, others may find buying an existing business an attractive and less risky alternative. Anyone with such a desire would do well to read this book before his or her purchase. Gibson, who advised buyers of small businesses for over 30 years before retiring, has written a comprehensive and readable guidebook. He says two major keys to success for the buyer are “discovering why some businesses and some people make a good fit, and doing some careful homework before buying in order to learn what makes the business run and what would make it run better.” The author’s advice about what kind of business to buy is helpful, but the book’s greatest value is in its coverage of the financial aspects of a potential purchase. Gibson offers a useful discussion and many examples of financial statements, addressing such important topics as adjustments to income and net worth and the accuracy of statements. His in-depth explanation of business valuations, including earning capacity and valuation factors, is alone worth the price of the book. Gibson also offers advice for how to structure a purchase agreement and provides guidance for the closing, including performance of due diligence and understanding when it’s the right time to buy. The author includes helpful case histories and tables throughout, along with an appendix of sample agreements, financial spreadsheets, a purchase contract and a bill of sale. The book is a complete package and will bring a level of sophistication to a buyer that will help ensure he or she is asking the right questions and using the right tools to objectively value a business.
An informative, accessible read likely to give any buyer the ability to limit his risk and ultimately make a wise buying decision.
