Buying a Tenerife Business?
Looking for a Tenerife Business?
Most people interested in buying a Tenerife business research the internet before they make arrangements to come out and view businesses. That we understand, but the sheer volume of Tenerife businesses for sale makes that very difficult, especially if you want to scratch beneath the surface and see what a business is all about.
You will also need to have some geographical knowledge of the local areas to know which areas are busy. Some areas are not busy at all times, or they have been passed by because of newer business areas nearby.
The best thing to do is use the internet to to build up some knowledge and then contact a local agent who can help you show you some Tenerife Businesses for sale. Be sure to provide a detailed specification of what you are looking for because it will save time. That can always be reviewed if necessary during the viewing schedule, of course.
Do not pay any deposit to secure a business until you are completely satisfied that everything is acceptable.
What you need to consider before you buy a Tenerife business.
When you walk into to a Tenerife business, take a look around and see if it is busy, how many staff are working there, is everything in good condition, is investment required. It is always a good idea to look at a business with a critical eye. Be sure to find out how long the current owner has had the business and if there is a genuine reason for selling.
One of the most important things to consider is what type of Tenerife business would suit you in terms of your capabilities and comfort level. You will also need to decide what working hours you will reasonably be able to work without overstretching yourself.
When viewing a business it is important to find out if everything is fully legalised because that can be a costly process in Tenerife. That may involve checking everything out at the Town Hall.
Before proceeding with a purchase it is a good idea to appoint a Tenerife Gestoria (Accountant) who will be able to check everything out for you you, better to be safe than sorry. Choose a Gestoria who can clearly speak you own language. Your Tenerife Gestoria should be able to look at the existing accounts and tell you how much the business is currently making in terms of profit. It is inadvisable to accept what the current owners may tell you.
Be sure that the Gestoria can provide you with a full breakdown of all the overheads and running cost for the business and whether the business has any debt. You are probably thinking about making an investment with hard earned money so be very focused about this.
Ask the current owners of the business to provde details of any contracts that the business has in place involving the supply of equipment fixtures, fittings and furnishings. Do not assume that everything is owned by the business.
Ask your Gestoria to examine the documents for the business to check the project is in order, the electricity and gas bulletins are in order and that the business is fully legal. Mistakes in this respect can be expensive to rectify.
Find out what the position is with any stock retained in the business and whether it is to be included or sold at valuation. Be selective about buying stock, you don't want to be paying for anything which is not readily saleable or approaching it's sell by date. Check the expiry dates on perishable goods.
Make sure any guarantees on equipment are inspected and handed over to you.
What are the terms of Occupation of the premises
Unless you are in the position of being able to purchase the freehold of a business you will be entering into a lease agreement with the landlord or being assigned the lease by the current owners.
Ask yourself if the current rent is reasonable because it may be negotiable if the business has been struggling during the recession. Obtain a draft copy of the lease agreement and sit down with your Gestoria and run through it carefully.
Be sure you understand what is being leased to you and what you will be purchasing from the owner.
What happens after you have purchased your business?
It would be a good idea to ask the current owners what support they will be giving you as part of the terms of sale. It is advisable that they remain in the business for a period of handover so that you can meet the regular clients and see how everything works.
Make sure you have a full list of contacts for suppliers ot the business and meet them if you can at an early stage to establish good working relationships.
Many new business owners want to make changes and that is not always a good idea. Before you introduce any changes it is wise to consider whether the impact will be positive. So many people make lots of changes and sometimes they are not for the best.
Selecting your Business Agent
There are many Tenerife Business Agents who would be delighted to show you some businesses based on you specification and you may choose to work with several agents during the buying process.
The most important thing is to be inquisitive and validate what you are being told whenever you can. Most good Tenerife business agents will be pleased to verify what a current business owner is saying.