Advice on buying a food business for sale
Looking for a food business for sale can often be a mine field. Every business has a history, and with that history comes risk. Don’t let that put you off though as there are things you can do to minimise the risk when investing into or buying a food business for sale. Emotion will play a big part in selecting the right food business for sale and that’s great as you have to be enthusiastic and passionate about the business you are buying BUT make sure you check your emotions with the points below:
Firstly I would always recommend that you speak to professional, impartial advisors like a Chartered Accountant or Solicitor. Once you have the particulars about the food business for sale that contain all the headline information, you then want to look at the numbers. Remember that the accounts SHOULD show the legally truthful position BUT they might not show the detail or indeed the real reasons as to why they look how they look. The last accounts of an existing food business for sale may say one thing but they could be almost a year old and in that time things can be very different, in a negative or positive direction. So you need to get your hands on up-to-date and detailed management accounts that show what is happening right up until today or at least last month. This kind of diligence might be the difference between you investing into something wisely and living a dream, or burning your money and creating a nightmare!
The next piece of advice I would give is to look at the last Environmental Health Officer’s (EHO) report into the food business for sale, this will flag up any operational issues that need attention. For example, if the last EHO inspection showed that half the equipment needed repairing or replacing you find yourself needing more money than you expected – in return you could negotiate the price down too. Whilst you are looking into this, I would also get a copy of the lease or property inspection report to ensure that you don’t end up taking on a building that in the end might cost more than the food business that you are looking at buying.
Finally, where possible, go for purchase options that don’t leave you with the political and legal hangovers that sometime occur when buying or investing into a food business. It is often best practice to look at an asset purchase, which the seller might not want but I personally think is best for a buyer. I would still recommend that you get independent advice but buying the assets rather than the company means that any legal challenges or debts that the old company has go with them and other than redirecting some post and people to the old company you can focus on a fresh and clean start.
Whatever food business for sale you end up choosing, we are very happy to advise and answer any questions you have along the way here at Jasper’s Catering Franchise. Email us at [email protected]