Business For Sale - An Inviting Mistake?

In such economically distraught times all we hear about in the news is how many people are left unemployed and how many businesses are forced to close their doors.  What we tend not to hear about is the amount of businesses that have been bought “ready-made”.

Buying a business can be an extremely attractive proposition.  You can buy a business without having to worry about setting it up and launching it - instead you can hit the ground running.  The same goes for franchises, which involve many of the same benefits and downsides.

There are pros and cons involved in buying a business;

PROS

A Working Machine

When buying a business you will be buying a complete machine that has been proven to work - you will be basically skipping over the first teething years every business has to go through and you will jumping in as the step-parent as the business matures - with that maturity comes a client/customer base, public image, etc…that can often be priceless.

It’s Been Done

A lot of the work that goes into understanding the market and target audiences has already been completed and the aim of the business has already been set.  The business will be in a position to understand how the market works and how the competition thinks.

Paperwork

You won’t need to sit down spending countless nights working on business plans, marketing schemes and yearly forecasts - all this will have been done and you will be able to simply project how the coming year will feel by looking back on previous year’s figures.  Historical data will be a hugely important feature of any business for sale and you don’t’ get the benefits of hindsight when starting up a new business.

CONS

Costly

If someone is willing to sell their business that they have brought up from the ground after years of hard work then they are going to want a handsome sum for it.  They won’t be keen to give it away for a pittance.

As a buyer you will be looking to spend a price worked out of the yearly turnover - it is between you and the original business owner to come up with a figure that pleases both parties.

Additional Help

You won’t be able to do it alone - you will need to bring a solicitor and an accountant on board to supply professional advice.  Don’t forget to include their fees when making the decision as they can quickly mount up.

Take Everything

When you buy a business you will be legally bound to take with it every contract that the business is involved with whether it’s with employees, clients, etc…this will not always be a happy coincidence.  Employees for example can leave their loyalties with the previous owner…

Buying A Business?

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