| Buying an already existing business for sale is a | | | | suppliers and a customer base are included with |
| sure way to avoid failure. In saying this, you still | | | | an existing business. This is priceless and |
| have to research any business for sale you are | | | | something that could take a new business quite |
| interested in always seek the advice from your | | | | some time to achieve this. |
| accountant and solicitor. Be sure not to rush into | | | | This said, there can be negatives when buying an |
| to anything and make sure you investigate any | | | | established business. If money is no object, then |
| potential business for sale. Remember when you | | | | disregard this next point. Established businesses will |
| use the services of an accountant, solicitor or a | | | | always be more expensive then starting a new |
| business valuation expert; always include their | | | | business, and as a result require more funds. In |
| fees in your bottom line. If you choose to cut | | | | saying this, the banks and investors would be |
| corners to save money by not using these | | | | more likely to put up the funds for a business |
| professional services, may actually cost you | | | | with a track record of profits and sales because |
| money in the long run, a lot of money. | | | | there is less risk involved. The better a business is |
| The most important point to remember is to | | | | doing, the more money you will have to pay for |
| NOT buy a business based on your emotions. This | | | | it. Businesses that are under performing will |
| is a common mistake people make when buying a | | | | obviously be priced accordingly. |
| business for sale. People fall in love with a business | | | | Always be aware when in the negotiation process |
| location, working hours or the big money | | | | that there may be agreements or contracts in |
| promised, but without proper research and | | | | place with existing customers. Whether or not |
| financial background checks of any business for | | | | these agreements are profitable for this business, |
| sale, it will almost certainly end in disaster. | | | | they may have to be honored. You need to be |
| The only sure way to avoid failure when staring a | | | | aware of these agreements and the impact it has |
| new business is to not start a new business. The | | | | on the business. |
| current statistics of new businesses that do not | | | | If the reputation of the business for sale is less |
| make it past the first 12 months of trading is | | | | then perfect, for example over priced products, |
| almost 80% and the businesses that do make it | | | | delayed lead times, quality issues etc. You can use |
| past this milestone usually won't see a profit for | | | | this to negotiate a price that you feel is justified. |
| another 2 years. Statistics also tell us that people | | | | You might want to find out the reason behind the |
| who buy an existing business are much less likely | | | | sale of the business. Is the sale is due to the |
| to fail. Buying an existing business that has already | | | | retirement of the owner or is it for sale for |
| made it past the first couple of years trading is | | | | another reason. Legally the owner does not have |
| the safest option. | | | | to disclose the reason behind the sale, however if |
| Another positive when buying an existing business | | | | the owner is not willing to tell you why he is |
| is they usually have an existing cash flow, where | | | | selling, I would pass on his business and move on |
| this would take a new business quite a while to | | | | to the next business for sale. |
| develop. Trained staff, developed rapport with | | | | |