Should you buy a business?
Buying a business can be a good option if you feel you want to
run a business but you're not entirely sure what you want to do, or
if you don't have an idea for a new product. It's a great way to be
your own boss without the gamble and hassle of setting up a new
business - but there are some things to think about
before you go making any hasty decisions. This guide introduces you
to buying your own business by looking at:
- The pros of buying
- The cons of buying
- What to consider
The pros of buying
If you choose wisely, the business you buy will have everything
in place for success: a proven track record, business and marketing
plans, employees, an established market, a customer base, a
reliable income (and so a salary for you), a good reputation, and a
network of suppliers and contacts. This not only makes your life as
a business owner easier, it helps secure finance - banks lend up to
70% for business acquisitions, which is a lot more than they risk
on start-ups.
- The business should have everything in place for success
- Makes your life as a business owner easier
- Helps secure finance
The cons of buying
Initial investment tends to be more expensive than starting up,
and fees for accountants, solicitors and surveyors need to be taken
into account. You may well then have to invest more on top of the
purchase price to make the business the success you want it to be.
Bear in mind that you may be met with animosity from staff and
customers if you try to change too much, and you may feel
restricted by taking on someone else's plans rather than forming
your own afresh.
- Initial investment is high and includes various professional
fees
- More investment is usually then needed for success
- Existing staff and customers may be resentful
- Carrying out someone else's plans rather than your own can feel
restrictive
What to consider
The first and most crucial thing you need to know is why the
current owner is selling up. Be rigorous in your questioning and
get a good solicitor and surveyor to check things out - you don't
want to invest in a failing business. Keep a very close eye on your
budget - be conservative about what you think you can afford
as you'll almost certainly have to put in more money after
purchase. Think about relationships with existing suppliers and
staff - can you be sure you will be able to renew
contracts? How will you keep the business' network happy if
you don't?
- Be rigorous in finding out why the owner is selling
- Be conservative with what you think you can afford
- Think about relationships with the business' networks and
contract renewal
To help you along, we've created Smarta Buisiness Builder the one place where
you can find all the tools you need to start developing your
business.
Smarta Business Builder
To help you on your business journey, we've
created Smarta Business Builder, the complete online
tools package for growing your business. Website, Business
Planning, Accounts, Legal Docs and Email - all in one place - from
just £20 per month with no contract! Try it out today!