How can you acquire an existing business?
There are distinct advantages associated with buying an existing business; the main one being that you can start trading straight away. When you acquire an established business you don’t need to wait for the fit-out of the property and you can draw revenue immediately from the existing customer base. This often comes at a price (the purchase price of the business), but if you can pick up a bargain if often makes sense to do this option.
Step 1 – Find a business that interests you
Most reputable real estate companies already have business for sale listings that may interest you. The listings usually have information on the current status of the business, lease and financial details.
Step 2 – Check the lease of the current Business that you want to buy
Due Diligence is a crucial part of the process. The new owner needs to ensure that the current lease agreement allows the business to be transferred. If the current lease does not stipulate the transfer to a third party, coordinate with the property owner and sign a new lease agreement. Rental price may change in the new lease agreement. If it happens that the owner wants to use the property or do not want to continue renting the location, then buying the business is not feasible. Bear in mind that generally, before a business is opened to the market, it should have already gone thru the process of checking with the property owner if they allow the transfer of the lease. The current business owner cannot, by principle, sell the business if they know that the lease does not stipulate the transfer. However, it is still important that you check. Your real estate agent can negotiate the terms of the new lease for you. Or if it’s non-negotiable, then they can look for another location. In the case of a franchise, it doesn’t take location or lease agreements into consideration. You can put up the business anywhere that you chose.
Step 3 – Sign the new lease or assignment of lease rights
Interested parties sign a business transfer agreement once the property owner agrees to the transfer of the lease. The real estate agency facilitates this transfer. They check the lease documents, coordinate/negotiate with the owner, and draw up the necessary documents for signing. It’s painless and hassle-free when you let the experts take charge.
Step 4 – Check tax receipts and other contracts from suppliers if you want to keep the existing business name
The major advantage of keeping the current business name is that the registration process is faster, it usually only takes about 3-5 weeks. You will also retain the clients that are already loyal to that particular name or brand. When buying an existing business, make sure that the previous owner has their tax payments up to date. Also, check for existing debts with current suppliers. If the business is transferred to a new owner without any name change, the risk of being chased for outstanding debts is quite high. Remember to get the tax receipt and all other supplies straightened out until the handover date.
Step 5 – Hire or re-train existing staff
Depending on the degree of revamping that you decide to make on your business, you have the young population of Cambodians eager to make a name for themselves. The workforce is diverse, all you need to do is to look for the right staff.
Can I Ask You for Advice?
Feel free to question us any concerns you may have not limited mutual trade, foreign direct investment in Cambodia, and what we have in the business alone. You can find contact us page on the right corner of our website or email us via our address; adaengdev@gmail.com here. Or email us via adaenglandco@gmail.com for land purchase, land conversion, and hold the land on your behalf.