Why Buy an Established Business Rather Than Start Your Own Business?Mmmmm
You are ready to start your new business but you are not sure whether it might be better to buy an established business.
Here are a few m's to think about.
First of all and most important you must remember that businesses are sold for a reason and it is important to not only remember that but also take this into account in your decisions.
So let's look at why you should buy an established business.
1.
Maturity:An established business has had time to mature, establish itself in the market and build up some good will.
Of course you need to ensure that the business is running efficiently and effectively.
2.
Market: It has established its brand and already captured some of the market.
Again ensure that the image that the company projects is one that you can live and work with and is not a negative brand.
3.
Maximisation: You can maximise your time spent on running your business, because you will not have to spend time setting up and establishing the business.
Make sure that you are not going to have to spend time making the purchased business efficient.
4.
Minimisation: You will minimise your costs as you will not have to spend money on breaking into the market.
Also you will usually obtain your stock, materials and equipment at less than cost price when your buy your business.
It is important that you ensure that you buy the established business as an appropriate cost and are not overcharged for "good will".
5.
Manufacture: You will buy some of your stock when you buy the business.
In addition your manufacturing processes as well as the rest of the business processes will already be set up and tried and tested so that you do not need to spend time and money setting them up again.
Ensure that the arrangements, leases and terms that the existing company has are transferable and acceptable.
The existing processes should be workable and not the reason that the company is for sale! 6.
Management: If you buy a larger company your management and staff will already be trained and in situ.
Of course you need to be able to get on with them and ensure that they have not learnt bad habits! 7.
Monopolise: The established company, or whoever buys it, will be your competition if you set up a new business - so buying it allows you to monopolise more of the market and available customers.
This is probably one of the best reasons to buy and established business.
Many small businesses are bought by much larger businesses just to take them out of the market!
Here are a few m's to think about.
First of all and most important you must remember that businesses are sold for a reason and it is important to not only remember that but also take this into account in your decisions.
So let's look at why you should buy an established business.
1.
Maturity:An established business has had time to mature, establish itself in the market and build up some good will.
Of course you need to ensure that the business is running efficiently and effectively.
2.
Market: It has established its brand and already captured some of the market.
Again ensure that the image that the company projects is one that you can live and work with and is not a negative brand.
3.
Maximisation: You can maximise your time spent on running your business, because you will not have to spend time setting up and establishing the business.
Make sure that you are not going to have to spend time making the purchased business efficient.
4.
Minimisation: You will minimise your costs as you will not have to spend money on breaking into the market.
Also you will usually obtain your stock, materials and equipment at less than cost price when your buy your business.
It is important that you ensure that you buy the established business as an appropriate cost and are not overcharged for "good will".
5.
Manufacture: You will buy some of your stock when you buy the business.
In addition your manufacturing processes as well as the rest of the business processes will already be set up and tried and tested so that you do not need to spend time and money setting them up again.
Ensure that the arrangements, leases and terms that the existing company has are transferable and acceptable.
The existing processes should be workable and not the reason that the company is for sale! 6.
Management: If you buy a larger company your management and staff will already be trained and in situ.
Of course you need to be able to get on with them and ensure that they have not learnt bad habits! 7.
Monopolise: The established company, or whoever buys it, will be your competition if you set up a new business - so buying it allows you to monopolise more of the market and available customers.
This is probably one of the best reasons to buy and established business.
Many small businesses are bought by much larger businesses just to take them out of the market!
Source...