PerfectBusiness - The Entrepreneur Network to Create Your Perfect Business

Table of Contents

Web

Technology

Location

Legal

Personnel Management

Risk Management

Insurance

Business Success Tips

Sample Documents

Checklists

Contributing Authors

	Steven D. Strauss Author of The Small Business Bible
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	Tom Severance Author of Business Start-Up Guide
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	Joe Kennedy Author of The Small Business Owner's Manual
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	Stephanie Chandler Author of The Business Startup Checklist & Planning Guide
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Buying a Business

Buying an existing business might be the way for you to go. Even if you have clearly decided to start a business from scratch, you can learn a great deal by investigating and analyzing similar businesses for sale. The more information you can obtain, the more businesses you look at, and the more questions you ask, the more likely your start-up will be successful. Take the time to search. You may even find a gem.

The major advantages of buying an existing business are:

You can buy at a bargain price and bargain terms because the owner is often eager to sell.
You can inherit proven inventory, supplies, equipment, and a facility at a bargain price.
You can inherit good employees and loyal customers.
You can be the beneficiary of goodwill and a positive reputation.
There is less risk because the business has a track record.
You can be profitable sooner.
You can obtain a good proven location.
You can save time by obtaining everything in one transaction.
You can take advantage of established credit and supplier relationships.
The financial records of the business can be a valuable starting point in running and growing the business.
The seller may be available for valuable future assistance.
You eliminate one competitor.

The major disadvantages of buying an existing business are:

The price may be too high.
The business or owner may have a bad reputation.
The personality and decor of the business may not reflect your tastes.
You may inherit incompetent or inflexible employees.
The business may be in a poor location or facility.
You may inherit antiquated or obsolete inventory, fixtures, and equipment.
The existing policies and procedures may be ineffective.
You may inherit inappropriate customers or be unable to retain the valuable customers.
You may not get along well with the existing landlord.
You may be liable for contracts entered into by the prior owner.
There may be some hidden debts and liabilities that unexpectedly show up later.
The owner may take the customer base and goodwill to a new business or location.