subject: Benefits and drawbacks of buying an present business [print this page] Should you get it right, there might be many good the reason why shopping for an present enterprise might make good enterprise sense for you. Keep in mind although, that you may be taking over the legacy of the earlier enterprise proprietor, and wish to concentrate on each facet of the enterprise you are about to buy.
Benefits
A number of the groundwork will have already got been executed in getting the enterprise up and running.
It might be easier for you to get finance as the business may have a proven monitor record.
A market for the product or service may have already been demonstrated.
There may be established clients, a reliable revenue, a status to capitalise and build on and a useful network of contacts.
A business plan and advertising technique should already be in place.
Present staff should have experience you can draw on.
Many of the problems will have been discovered and solved already.
Disadvantages
You often need to invest a large amount up front, and will also have to budget for professional fees for solicitors, surveyors, accountants etc.
You will probably also need several months' worth of working capital to assist with cashflow.
If the business has been neglected you may need to invest quite a bit more on top of the purchase price to give it the best chance of success.
You may need to honour or renegotiate any outstanding contracts the previous owner leaves in place.
You also need to consider why the current owner is selling up and how this might impact the business and your taking it over.
Think about the emotions of current employees - it's potential they is probably not proud of a new boss, or the business may need been run badly and employees morale may be low.
