Looking to Buy Another Business?

written by Carlos Alvarez
11 · 14 · 22

When you make the decision to expand your e-commerce business, it can get complicated. There are various reasons you should, but more importantly, there are various reasons you should not. Entrepreneurs often get distracted while building their businesses. Shiny object syndrome is a real weakness! Many entrepreneurs want to do all the things. When looking to buy another business, Wizards of E-com has a few tips to consider before taking this financial leap.

Things to Consider When Looking to Buy

Consider how much of yourself you would have to give if you expanded into different territories. Do you have the physical and mental bandwidth to handle it? Think about how much time it will take through the acquisition. It will take a large chunk of time and resources from the next quarter to close the deal. This can hurt your business financially and end up causing more debt. Other things to consider include what products they sell, what type of leverage you have within the purchase, and understanding why they are selling. 

Understand Their Reputation and Why They are Selling

Do some digging and find out why the owner decided now was the best time to sell. Market research into their product and business practices will help you decide if this is a good time to buy. No need to invest in a failing business. Bad business practices can follow the new owner. The business is associated with a brand and not a person, so even if it passes to new hands, a reputation is not so easily recovered.

Are the Products Similar to What You Offer?

When adding to your empire, consider the products the business sells. Are they similar to what your business offers? This is a great benefit to advertising. Having products that cross over can increase your customer base. New and old customers will come to your shop. If this isn’t the case, it can hurt your business.

Leverage

Leverage tends to have a negative connotation, but it can be beneficial when it comes to buying and selling. There are two types of leverage that can affect your business dealings: micro and macro. Macro leverage is debt over assets. This means if the debt is greater than the assets, it will negatively affect your ability to buy. Micro leverage is when you have space to negotiate. A seller may have a certain time frame, terms, or beliefs that mean they need to sell quickly. Buyers can use this to their advantage for a good deal. 

Think Before You Buy

Consider if you have exhausted all avenues of your current business. Tapping into the potential of your current business is important before investing in another one. Purchasing another business is costly and time-consuming. Before seeking to expand, make sure you invest all the money and resources available into your existing business. The time, cost, and resources can bankrupt your new and old business, leaving you with nothing but massive debt. 

Wizards of Ecom has a large variety of classes, tips, and workshops to help you build and expand your business. 

Carlos Alvarez

"A bit about " Carlos Alvarez " in his own words: "Alvarez sums up his mission to help online sellers with a quote he heard early on in his career. “New sellers constantly compare their Chapter 1 to another seller’s Chapter 20. They see what other veteran sellers are doing and they judge their success and failures by this benchmark.” His goal is to show sellers a realistic path to success, and how they can enjoy every chapter of their own, unique journey."

Related Posts

Grow Your Ecommerce Sales with these 9 Best Marketplaces

Grow Your Ecommerce Sales with these 9 Best Marketplaces

When you want to grow your business, there are a variety of e-commerce platforms to help you achieve this goal. Different platforms offer different ways to grow your online store. Wizards of E-com can help you find the best fit for your business. Here are nine of the...

Fifteen Ways to Build Backlinks to Your Store

Fifteen Ways to Build Backlinks to Your Store

One of the best ways to boost website traffic is with backlinks. Here are 15 legitimate ways to build backlinks to your store. These strategies work, but they take time, patience, and perseverance. Create Content That Is Needed  If the content is interesting,...

Write the Best Copy that Sells for Your Ecommerce Store

Write the Best Copy that Sells for Your Ecommerce Store

When you are working on copy to sell items on your e-commerce platform, there are some things that you need to know to help sell your product.  Why Does A Great Copy Matter? The first and maybe the most important reason why good copy matters is that it builds...

Comments

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *