Making the decision to run a business in New Brunswick can be a big one. It’s an exciting decision that carries some risk. But it’s also just the beginning of the big decisions.
You need to decide what kind of business you want to run, what industry it will encompass, and how soon you want to start operations. With those decisions made, you then can focus on whether you want to start a business from scratch, or you want to buy an existing business.
Buying a business for sale in New Brunswick carries some advantages. Primarily, you will have a customer base in place. You also can be operating the business much faster than if you start your own business.
Finding just the right business to buy in New Brunswick takes a bit of research on your part. Fortunately, numerous resources exist to help you move forward quickly and successfully.
Why Buy a Business in New Brunswick? Buying a Business vs. Starting a New One
It pays dividends to weigh the pros and cons of buying a New Brunswick business versus starting one from scratch.
- Pros When Starting a New Business in New Brunswick
- Making your own decisions: If you want complete control over the formation of the business, starting a business from scratch allows you to do this.
- Building a legacy: A business that you start from scratch and grow over the years can become quite the source of pride. You can become an important member of your community and leave something to pass down to your heirs.
- Finding funding: Finding local New Brunswick business grants to fund your entrepreneurial dream is easier when you start a new business. An existing business may not be eligible for grants.
- Potential for major success: It’s possible that your new business idea is so strong that it becomes a huge success, leading to profits beyond what you could’ve imagined. When buying an existing business, you want to grow, but you also know that it has an income history that may not indicate as much potential upside.
- Cons When Starting a New Business in New Brunswick
- You’ll be doing it all: Most new business owners end up doing a lot of the setup and preparation work for opening on their own. This involves long hours and potentially dealing with some frustrating regulatory situations that have little to do with the actual business idea you have.
- Greater financial risk: When you buy an existing business, it probably has a history of income, so you have a baseline idea of what kind of money you can earn. With a new business, the risk is greater because you have no history of sales or income.
- Convincing others of your dream: Even if you can see the tremendous potential of your business idea, convincing others to share in your vision can be extremely difficult. If you don’t like being told “no,” starting a business from scratch and seeking funding potentially will be discouraging.
- Pros When Purchasing an Existing Business in New Brunswick
- Shorter time to opening: When you purchase an existing business, someone else did the startup work and research. You may want to make a few tweaks, but you can be operating the business much faster when you’re buying an existing company.
- Financial books tell the story: If you buy an existing business, you inherit financial records that give you a clear picture of the business’ performance. This makes it easier to place a value on the business for the purchase price.
- Loans are easier to get: When you buy a business that has a track record of sales and income, a bank in New Brunswick is far more likely to give you a business loan to make the purchase. A new business that has no financial history is a riskier candidate for a bank loan.
- Option of franchising: If you like the idea of having a big brand name backing you and helping you succeed, you could consider buying a franchise in New Brunswick, rather than starting a business on your own.
- Cons When Purchasing an Existing Business in New Brunswick
- Living with someone else’s decisions: If you purchase an existing business, you have to live with the decisions the previous owner made for location, employees, and various contracts. You eventually can make some changes, but it will take a while to unwind some decisions you inherited that you don’t like.
- Understanding what you are buying: Never take the previous owner’s word for what you are receiving with your purchase. Hire an attorney and an accountant to go over the proposed deal and the business’ financial books, so you have a clear picture of your purchase.
- Less freedom with a franchise: If you purchase a franchise business, understand that you will have some limitations regarding advertising, the setup of the business, and what products you can carry. Unlike starting your own business, buying a franchise has quite a few rules you must follow.
How to Find Businesses for Sale in New Brunswick
Finding a business that’s for sale in New Brunswick is not as difficult as it may seem. Multiple resources are available in the province to help you find the ideal business to buy that fits your skills and interests.
- Online Business Marketplaces in New Brunswick
Websites that have lists of businesses for sale in New Brunswick can be a good place to start your search. Even if you don’t make a direct offer based on what you find at a marketplace website, you can gain a feel for what businesses cost and what’s available.
- Real Estate Brokerages in New Brunswick
Although real estate brokerages may seem like more of an option for purchasing a home in New Brunswick, many brokerages also list businesses and commercial properties for sale.
If you simply want to purchase a property that you can use to start a business, the provincial government lists New Brunswick surplus property for sale, potentially letting you receive a bargain price. Additionally, Saint John has business parks and research clusters that may appeal to you when looking for existing property on which to start a business.
- Online Classifieds in New Brunswick (For Sale By Owner)
Some New Brunswick business owners may choose to advertise their business themselves, rather than relying on a brokerage. This saves money in listing fees and commissions. If you would like to find a side hustle business that you potentially can expand into a full-time opportunity, online classified ads are a good place to look.
- Business Brokers in New Brunswick
One of the most helpful options for those looking to buy an existing business in New Brunswick is making use of a business broker.
A broker who focuses on businesses brings expertise about the local market in New Brunswick, whether you are seeking a business in Saint John or in a rural area. The broker can help you find a business in a certain industry or even a niche business.
When you are ready to negotiate the purchase of the existing business, the broker often can help you move the process along faster. The broker can anticipate roadblocks and help you and the seller find common ground.
How to Buy a Business in New Brunswick
- 8 Tips for Buying a Business in New Brunswick
- Do your homework: Take an extremely close look at the business’ financials. Use an accountant to verify the accounting books.
- Put things in writing: Although it is tempting to use a handshake agreement with the person selling business, place everything in writing to protect yourself. Have an attorney review all documents as well.
- Put a value on the extras: Canada’s federal government suggests that you make sure that any inventory or assets of the business you want to buy are part of the transaction. Make sure they have an accurate value, too.
- Pose as a customer: Before you go too far into the negotiations, visit the business as a customer (if possible). Gain a feel for how it operates.
- Find mentors: Talk with other business owners in New Brunswick that you trust to see what they think of the opportunity.
- Check the business’ reputation: Speak with organizations like the New Brunswick Business Council, The Saint John Region Chamber of Commerce, and the New Brunswick Better Business Bureau to learn about the way these organizations view the business that’s for sale.
- Be flexible: Negotiations to buy an existing business have numerous ups and downs. A business broker can help you navigate the process … but be ready for the unexpected.
- Ask for help: Some people selling a business are willing to stay on and help you for a few months during the transition. If you are buying a niche or specialty business, don’t be afraid to ask the owner for help.
- 4 Common Mistakes When Buying a Business in New Brunswick
- Letting emotions rule: Remember, this is a business transaction. Although it is difficult, try to avoid allowing emotion to guide your decision. Hiring an attorney to help with the process can take some of the emotion out of it.
- Not being patient: Don’t buy the first business that you see. It’s important to perform research into the business to make sure it’s a good fit for you. A business broker can be a valuable ally in this area.
- Not looking down the road: Don’t just focus on the negotiations to buy the business. Think about what things will look like several months and a few years into the future to ensure it is the right business for your skills and interests. This helps you make the right choice.
- Not holding back some funds: In the purchase agreement, insist on holding back part of the purchase price for a few months. If something is not as promised with the business, such as missing inventory, this money is invaluable.
