Buying an existing business eliminates the hustle of building one from the ground up. It also eliminates the risk of failure that keeps so many entrepreneurs away. Here is what you must consider, though, before making the move.
There is probably a click of purist entrepreneurs who scoff at the idea of buying an existing a business. Nevertheless it’s a great shortcut and can be as fulfilling as starting your own business. We mentioned buying a business as one of the alternatives to starting your own business.
True, there is pride in doing it all by yourself. Starting a business and sustaining it beyond those first years of struggle can invoke great satisfaction. It’s a little bit harder to actually prove the concept. Don’t get so smug now, purist, buying one can match the feeling. Imagine turning around a failing business? Yeah, even this kind of entrepreneur can feel like a genius.
This alternative is expensive though. You will be buying into a proven concept afterall so it’s only fair that you pay for that. You also need to have a budget for financing the scale of an existing business’ operations. You won’t be seeking your first customers but accommodating an established customer base.
When negotiating for the price have a broker help you get the best deal. It doesn’t matter how good you haggle for things. Use this opportunity to develop a habit of leaving it to the pros.
Once you’ve organized this don’t sign into it just yet. Have a look at that enterprise’s records. Do it with the same attention to detail you put into your betting. Don’t try to deny it, you do bet and you should feel bad. Involve accounting and auditing expertise to properly screen financial statements, tax records, accounts payable, accounts receivable and any other significant documents.
Getting into a working business model means you will find business systems already established. It’s up to you to decide whether to maintain it or change it to your taste. Remember, though, you will have to get rid of employees and alter any forms of bureaucracy. This will be a test of your management capabilities.
Speaking of management capabilities, please do not forget the implication of buying a business. You should go in with a handle on running a business. The traditional entrepreneur is on a learning curve and builds her experience with every stage of growth.