Setting up a new business is not the only way to become an entrepreneur. Your career as an entrepreneur can begin, for instance, through
generational transfer or
partnership or becoming an associate.
On acquiring a company you must consider how to assess the enterprise that is to be acquired: is the asking price correct and what are the enterprise’s possibilities for success in the future. You should familiarise yourself with the company's accounting, customer base and market. The current state of the company is no guarantee of the future, so you must in any case prepare a solid, long-term business plan and be prepared for changes.
Acquiring business operations
Acquiring business operations means that your company acquires part of the balance of an operational company. The advantages of acquiring the business operations include the fact that the acquisition applies to specific asset items and you may acquire an existing customer base, for example, but all old tax liabilities and other hidden risks nevertheless remain with the selling enterprise.
In both cases there are two methods for determining the value of the enterprise: the substance or asset value, and the productive value. In addition, you can calculate the discontinuation value, which indicates the amount of cash left in the company if the operations are discontinued, all assets are sold and all liabilities are paid off. The discontinuation value is the lower limit for the sale price, particularly from the seller’s point of view. It can often even be negative.
Generational transfer involves finding a person within the family or extended family to continue with the business. If you are planning to continue a family business, consider whether you have the motivation, competence and maturity to continue the business.
Even generational transfers require a certain degree of company value assessment for taxation purposes, among other matters, in order to determine the current values of assets. The value of a company is usually determined on the basis of both asset-based and yield value calculations.
You should examine the tax consequences of the generational transfer for the transferor, yourself and the company. You must also examine whether you require credit to pay the acquisition price, and the schedule for its repayment.
Change of ownership