Buying an Existing Business
This is always easier and safer than starting one from scratch.
Statistically a large number of start-up businesses will fail, with those
surviving often being sold to have their new owners make the real gains. So
let the hardened entrepreneurs take the risk, develop the market, and find
out what works and what doesn't. In buying an existing business you are
getting;
(1) An existing customer base - these are the people or businesses
that already do business with you. This means cash flow from day one.
(2) Accepted products and/or services. They have already been developed and
accepted into the market place.
(3) Existing employees - experienced and
skilled staff who understand the business and it's customers, most valuable
to any going concern.
(4) Operating Systems - these are key in any business
activity. How the business operates, what keeps the customers coming and the
cash flowing? This ties everything together. It's your business formula
developed by the previous owners; it may be perfect, or it could be in need
of major changes.
(5) History. The previous owner has operated this business
and will be able to show you it's financial records, it's cash flow, sales
and expenses. All this lessens the risk to you and your bankers, showing the
companies performance and providing you with a platform on which to build.
Before starting out decide what you want, what your objectives are, and
understand your strengths and weaknesses. Plan the process.
Richard O'Brien (nzbizbuysell.co)
When purchasing any business always seek professional advice.
For further details, visit www.nzbizbuysell.co.nz
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