Should You Buy or Sell a Company to Relocate?



There are many advantages of buying a company that stood long before you stepped into the role of entrepreneur. Maybe you have considered yourself to be an entrepreneur for many years, but are looking for a new investment opportunity.

that already stands has its advantages – starting with the legwork that has already been done for you, having an existing customer base and even having staff hired, trained and ready to go.

There are – of course – downsides to this type of business venture as well. For example, if the business has struggled under poor management, some of the skeletons might come out of the closet far after you’ve written the check and shook the owners hand. Existing clients may be unhappy. Employees might have a bad taste in their mouth from the previous management. Any number of things could happen.

But those are the risks.

We know the risks and the potential benefits of buying a business, but let’s talk about what happens when you want to relocate that business.

Before you buy you’ll want to see if the move is going to be worth the initial investment. If your business exists primarily online, such as a publishing or digital goods company, then the move will be fairly easy. You will still need to find employees willing to move, or hire new ones at the new location, but in general it’s a fairly straightforward practice. Your online customers are the same, your business model is the same – you just have a new location.

Relocating something such as a laundromat however, is nearly impossible. Not that you couldn’t buy the name if you really wanted, but retaining customers that aren’t near the beloved washers and dryers that they’ve fallen in love with is simply not going to happen. Some businesses only benefit from customer loyalty when it’s convenient, and this is a good example of a business like that.

If you are looking to buy a business and move it to your current residence you will want to go over their financials and compare them to the cost of living in your area. The current owners will have X amount blocked out for rental space, employee pay and utilities. These costs are different across the country. You will want to factor in the cost of living when calculating your rental space and employee pay. If you are unsure of the different rates between two locations regarding electricity, check out SaveOnEnergy.com. They provide an easy way to compare rates from one location to another, as well as through one provider to another. Other companies offer websites as well to compare – always research and calculate before making the decision to relocate businesses.

If you are lucky, the fees in the new area will save you money, but that may not be the case. If it’s not, then the move might cost you more than it’s worth. Think utilities, new employee hiring/training, new office/facility/storefront, and the cost of brand loyalty over the long haul (think back to the laundromat example).

Knowing the small details about the area in which you aim to relocate can help you to decide if this is a good buy, or something you should pass on. If you aren’t looking to move your business, then obviously this isn’t a factor.

One other major thing you will want to look into is the laws from one state to another. Is that going to change the way business is done, and if so is it worth it?

Now let’s talk about selling your business in the midst of a personal relocation. First, is this something you really want to do? Is it possible to relocate your business with you? There is a possibility that you can have your cake and eat it too. Often people sell and relocate when business isn’t going well, but if you are looking to move, you may be able to save money in order to keep your business.

If you are still looking to sell, you may want to do that research anyway in case you find a potential buyer who may shoot it down due to location alone. This could be a good selling point for someone looking to buy.

No matter what part of this transaction you find yourself on, understanding the good, the bad and everything in between will enable you to make the best decision for yourself and your business ventures.

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