Buying Your First Business
As an entrepreneur, you are always on the lookout for a new opportunity, or to compare your business with what is available in the market. There are lots of benefits to buying an existing business than starting one from scratch. If you are buying your first business or if you are a seasoned entrepreneur, consider the following when deciding your next venture.
02 July 2020
As an entrepreneur, you are always on the lookout for a new opportunity, or to compare your business with what is available in the market. There are lots of benefits to buying an existing business than starting one from scratch.
If you are buying your first business or if you are a seasoned entrepreneur, consider the following when deciding your next venture.
- Established Businesses
You buy an established business with an existing customer base. Therefore you start earning a return on your investment from day one. If you start a business from scratch, it might take some time to establish credibility in the market, and you're competing with existing businesses that had their chances to perfect their business model and already paid their school fees. It generally takes anything from 12 to 24 months to generate the same income as that of an established business of the same size and industry within the same location.
That’s why you pay a premium for an established business with a solid income stream – That’s the goodwill.
With a start-up, you do not have a model to base projections on and you have no benchmark for measuring performance. You will have to create the model and as exciting as this can be, it still takes time and substantial capital investment. You still do not have the assurance of success if you buy a business, but you do have a foundation for an income and can grow the business from that base and put your personal touch to it including your expertise built up over years.
- Funding and Financing Existing Businesses
Considering how many business start-ups fail within the first six months, mostly because of cash-flow constraints, it is understandable that investors and lenders are concerned when it comes to lending money to a startup. Instead, when you buy a business that has solid financial records, a proven track record of performance, and various assets, lenders and investors will consider the above and be more open to funding a portion of the purchase price.
Searching for a business that not only meets all your requirements with regards to income, location, industry but also falls within your budget can be difficult. Our website assists buyers to view various business for sale before committing. Compare selling prices, business models, and industries with each other. Business for sale allows you to make contact with the Franchisors, business owners, or brokers who listed the business across the country.
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Before taking over a business, one should always conduct a proper due diligence. In fact, it is advisable to make any offer of an acquisition of a small or medium business subject to the completion of your own investigation into the affairs of the business. There are many methods to verify the numbers of an existing business and one can also use the services of a professional accountant who specializes in this field.
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