buying a business A quick way to get started
For many people, starting a new business poses too many obstacles.
Creating a business plan, finding investors, and dealing with legal issues cause many would-be business owners to become frustrated and walk away.
If this is true of you, take heart. There are other alternatives.
Pros and Cons of Buying A Business
One alternative is buying an existing business. Buying an existing business is typically simpler and safer. Simpler because the start-up work has already been done.
Safer because the business already has a track history and will already have a cash flow.
However, in order to get these benefits, you will have to pay and the initial purchasing cost could be a barrier.
Other possible disadvantages could be business problems you are unaware of and outstanding receivables that end up being bad debt.
Researching a business before purchasing will help overcome these issues.
Questions to ask when buying a business
There are many different businesses for sale at any given time. Buying the right business begins with you – what you want and what you are good at doing. When purchasing a business think of the following:
- What business best matches your skills and experience
- What businesses interest you
- How big of a business do you want? Think about number of employees, number of stores, and sales volume.
- Where do you want your business to be located? Think about the costs of doing business in that area and the availability of labor.
Once you've chosen a region and an industry to focus on, investigate every business in the area that meets your requirements.
Seven Steps Towards Purchasing the Right Business
Just as there are the right steps to finding a good job, there are the right steps to finding the right business to purchase.
Step 1: Know your assets
In order to purchase a business, you will need financing. Prior to finding the business you want, you will need to determine what money you have available, what assets you have for collateral, and how much you can realistically borrow.
Step 2: Find a business
You can do this by checking classifieds under "Business Opportunities" or "Businesses for Sale" or through websites that specialize in selling businesses.
You can also use a business broker that will help you find and research available businesses.
Step 3: Make contact
Contact the owner to get all the details of the sale. Ask for specifics such as the reason it is for sale, its profits, what’s included in the price, etc.
Step 4: Do your research
Find out if the business is really worth the asking price. You can do this by researching similar businesses for sale.
Step 5: Take a look
Spend a day at the business so that you can get an idea of its day-to-day operations.
Step 6: Financing options
Visit banks to find the best possible financing.
Step 7: Make an offer
Once an offer is accepted, you will have a purchase agreement drawn up and signed.
When you buy a business, you start with the knowledge that the business is working.
You also start with customers and vendors in place. And finally, you have instant cash flow.
So, if starting a business from scratch is just a bit riskier than you want, buying an established business may be a perfect solution.
More About The Advantages of Buying A Business
See Also :
How To Buy A Business
Next Page:
The Advantages of Buying a Franchise
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