Buying a business in Dubai
What are the key elements one should review when buying a business?
A business is an organizational entity engaged in the trade of goods, services, or both to earn profit. Buying a business involves a number of key elements which one should review before making a decision any business for sale should be first analyzed carefully. These include:
One should make sure that all these conditions are met before going on to buying a business
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A business is a key investment that can have a significant impact on one's financial future. It is important to review all the key elements before making the big decision of buying a business. This resource will be reviewed shortly.
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A lot of people think about buying a small or local business, but they may not know what it entails. Buying a small or local business means you will be taking over as owner and operator with responsibility for hiring staff, managing inventory, paying taxes, maintaining equipment and more. If you're an entrepreneur who wants to start your own company from scratch without any competition in your space then this might sound like the perfect opportunity for you!
What are the key elements one should review when buying a business?
A business is an organizational entity engaged in the trade of goods, services, or both to earn profit. Buying a business involves a number of key elements which one should review before making a decision any business for sale should be first analyzed carefully. These include:
One should make sure that all these conditions are met before going on to buying a business
Target the right business for you:
You should also consider your business interests to know what business you would like to buy. One should see the business he or she is interested in and then find out whether it requires upgrading or diversifying to suit one's business interest. If possible, try looking for business which could provide you with opportunities of adding new products and services, reducing cost, improving employees morale and business image, etc.
In addition to this, business for sale should be purchased from a business broker or business agent who is experienced in selling businesses within your industry. A business broker will help you find the business most suitable for you and arrange due diligence on behalf of his clients which means that he will check all legal business registration papers, business contracts and business licenses. Business brokers are experienced consultants who can help you in finding the business to fit your skills, experience level and business interest in order to advance your career in business world.
For more information about buying or selling a business contact business for sale or business broker dubai at OLMEC CONSULTING FZ LLC
Price of business:
Evaluation
One should also review the business' selling price. A business is sold based on its market value which includes a business' tangible and intangible value. Tangible value comprises a business' physical assets such as property, equipment, inventory, etc., while intangible value consists of business name, reputation among customers & suppliers, brand recognition, business licenses and business operations.
Key pricing components
Price of business is one of the most important things business for sale or business broker dubai should be reviewed with business consultants before making a decision to buy any business. If you are buying a business which you would like to start, make sure that it has all the required resources including capital investment, support staff, relevant business licenses and business registration.
Expert Advice
Business consultant or business broker dubai should also be reviewed to see the business demand in the market, business growth prospects and business financials, including current business cash flow situation. In addition to this, business brokers can help you find a business with good potential at competitive price by comparing it with other similar businesses of the same business category which are currently for sale.
For more information about acquiring or selling a business, contact a business broker in Dubai at OLMEC CONSULTING FZ LLC
Heads of Terms:
When you buy a business, you should also review Heads of Terms (HOT) which is a short-form draft document that specifies the business terms and conditions to be subsequently detailed in business agreement.
Price and Commercial terms
It's critical to concentrate on the Heads of Terms, which define the price and commercial terms, as well as forming an important aspect of the final agreements. This is a buyer's chance to make their case public. Remember that the seller's first asking price is just a starting point for negotiation. The Heads of Terms will help bring attention to the talks.
To find out more about buying or selling a business, please contact Business For Sale or Business Broker Dubai at OLMEC CONSULTING FZ LLC
Do your due diligence:
A business should be purchased carefully through a business broker or business consultant. It is not advisable to buy business without doing your due diligence which means that you should take enough time to investigate business ownership, legal business registration papers and business licenses. You should also review all business contracts & business agreements to make sure that they are in order if any liabilities business for sale has business loans and business debts, business broker should assist you in arranging business debtors and business creditors.
The following due diligence should be completed depending on the target company's size and complexity:
Financial
Taxation
Legal
Insurance
Property
Environmental
Based on the findings of the due diligence, a buyer may want to renegotiate the price or delay paying the full consideration.
Structure
It's critical to select the appropriate structure so that you may expand your firm without spending a lot of money. Different structures have advantages and drawbacks, and can have a big influence on a buyer's tax liabilities. Whether the sale of the company should be done through an asset purchase or a share sale is one example. The new business can maximize growth and any tax liabilities.
Taxation in UAE
Now in UAE we have only one type of tax, however if you are opening this as a branch office you may want to consider the taxation of your HQ.
Funding
When the industry your company operates in is growing, it's a good idea to get financing. When you have a solid business plan and integration strategy, you'll be able to obtain the funding you require.
Cashflow
The cashflow available in the present business and the funds it can commit to avoid overleveraging should be considered. Future working capital and CapEx needs must be accounted for before making an offer. The cost of the purchase, as well as professional fees, must also be included in the funding request.
Equity partnership
Lenders for small businesses are unlikely to provide full funding. As a result, you may need to seek help from a private equity partner to close the funding gap. Each financing source has advantages and drawbacks; do your homework and consult an expert to ensure that the funding source you choose is best for your bottom line.
Integration and managing the change
Poor change management and ineffective integration are two of the most common reasons for merger and acquisition failures.
Culture
Culture is important when assessing whether an acquisition will be a success or a failure. There may be resistance to change or hostility toward the new owner among existing employees for the company being acquired.
Communication is essential.
Take the opportunity to meet with important personnel as soon as possible to understand their responsibilities and how the firm functions on a daily basis. Maintain your focus on your key strategic goals and development strategy, and bring along important staff if you want early buy-in and successful implementation.
When you buy a company, you should hire an advisor. They will help protect your investment and give advice about the process. If you are thinking of buying or investing in a company, call someone on our business consulting team.
OLMEC CONSULTING FZ LLC
Office G01, Block 12,
P.O. Box 487213
Dubai Knowledge Village,
Dubai, UAE