| Buying a Business in New York: 7 Things to Know |
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New York metro businesses are a strange animal- but what a vibrant, rich city to work in! There are a lot of things that make doing business in New York just a little different than elsewhere. Anything from taxes to traffic to working with New Yorkers - all considerations that go into buying a New York business.Of course if you are a native New Yorker - buying a business in New York is as natural as breathing. So as we proceed, we will be focusing specifically on considerations for buying a NYC business for non-New Yorkers.So without further ado... 7 Things to Know About Buying a New York Business:
All that said, bear in mind that the business you are buying will likely already deal with these issues. Such expenses are likely to be priced in. Are there any changes that you are considering with the business that might add to these types of expenses? 3. Where do Your Customers Come From? Although this point also speaks to what kind of business you are considering, it will be a central issue nonetheless. If you are a retail operation, are your customers locals, commuters, or tourists? If you are evaluating a B2B business, do your clients expect you to have a presence in New York City? Where your customer base comes from is centrally important for a New York business - especially if you have plans to significantly grow your business. Given the congested nature of the city, the ability to easily interact with clients and successfully throw a bigger net, it is important to understand whether this is at all feasible. 4. Does Your Business Need to Physically Be Here? Going hand in hand with point three, is it really necessary for your business to be physically located in New York? For a retail operation, this is a foregone conclusion. But what if you just service companies in the metro area? One example that we see time and again is printing shops. Many work in the city for customers and run production from either the outer boroughs or in New Jersey. There is at least one shop which we have worked with that does their production in Pennsylvania! This type of operation isn't going to work for all types of businesses. You might have clients coming to your office on a daily basis- in which case you are stuck here. But taking a hard look at whether or not some portion of operations can be moved out of the city has a potential for huge savings. 5. Why Do You Want to be in New York? Are You Buying in New York to Be a New Yorker, or because you want your target customers to be New Yorkers? This is a question that every non-New Yorker needs to grapple with! Some people (and I certainly am one of them) just love living in New York. Others view Manhattan with a jaundiced eye- a burden one must bear as part of their business life. They would rather commute to a home in the suburbs rather than deal with the hustle and bustle of the city on a full time basis. Understanding which camp you fit into is very important as you approach your buying decision in New York. Once you figure that out, it's time to map out how your personal life (and commuting routine) will fit into your new business. The last thing you want to do is buy a business - and the life style that it implies - only to find out you are miserable at the end of every working day. 6. Get Used to New Yorkers! Yes, there are a ton of cliches our there about New Yorkers. But like every where else, there is only so much truth in the myth. Yes, New Yorkers tend to be a little more fast paced about certain things, and perhaps a bit more direct when they speak. But you'll find that at the end of the day, on the whole, New Yorkers are just as friendly as anywhere else in the country. So don't try to be an outsider - just join the crowd! 7. In the End, Go Back to the Basics! We've touched on a lot of "soft" aspects to buying a business in New York City. Yet no matter what, the business you buy has to have solid fundamentals. That means good financials, generated sufficient cash flow for the owner, "clean" books, and no insurmountable red flags or problem areas. At the end of the day, buying a business in New York is no different than anywhere else- it has to be solid and predictable. Just make sure you observe the other factors that we mentioned, and are making a decision that is going to keep you and your family happy. |
(April 16, 2007) Buying a business in the big city should be an exciting event!
