Things You Should Be Careful of Before Buying a Business in Malaysia

2 min read

Buying a business has various benefits over starting your own company. Well, you may have weighed that in, but you should also be careful of investing in the right firm.

These are some things you should be wary of while deciding on a business takeover in Malaysia.

The Profit Scalability

Of course, the company has been making a lot of profit till now, but what about the market status? Will the business still be relevant in the coming days? Are there any innovations in development that pose a significant risk to the firm?

Remember, we have seen world-leading companies making losses eventually. So, instead of only looking at the current profit figures, you should think about the future as well.

Customer Retention

You shouldn’t only know the profile of the company’s customers. Assessing the firm’s relationships with them is equally important.

Various experiences and studies have shown that customer retention is more important than acquisition for the growth of a company. So, you should analyze if the present image of the company is favourable for you to market and sell to their existing customers. You can check the company’s online reviews for this purpose.

The Reason for Selling the Business

You should prepare a questionnaire that will help you cross-check the reasons the seller have for selling the business. Any conflicting answer is a huge red flag.

You will want the seller to be totally honest with you about selling the company. Ask them to note all the good and bad things; this will not only tell you if buying the company is a good idea but also assist you in preparing after the business takeover.

Confidentiality and Employee Statistics

Buying and selling a business could give a negative message to customers, suppliers, and other relationships. Thus, you should analyze if the buy sale process is going to be confidential even after you take over.

Furthermore, you should get to know the current employees in the company. Always check if they are happy working there, and see if you can depend on them for your future growth.