An aspiring entrepreneur is faced with the question - to open his own business from scratch or to buy an existing business. The same problem may arise for those who seek to diversify the areas of their activities. If a decision was made to buy a ready-made business, you should be very careful about the selection procedure.
Benefits of buying a ready-made business
The main advantage of buying a ready-made business is the possibility of a more accurate cost estimate. Indeed, with this approach to organizing your business, there is no need to establish contacts with suppliers, to form a client base. And when starting a business from scratch, this process can be associated with additional costs and will take time. Therefore, buying a ready-made business, an entrepreneur has the opportunity to immediately make a profit.
Another plus is that the entrepreneur has the opportunity to get not only a well-functioning business model, but also a well-known brand. The latter implies the presence of a group of consumers loyal to the brand, a certain degree of brand awareness, which significantly reduces marketing costs.
Finally, the operating company already has a team of qualified specialists who do not require lengthy training.
On the other hand, buying a ready-made business involves many risks.
Algorithm for choosing a ready-made business
Initially, it is necessary to determine the preferred business direction (retail, service industry, etc.). It is important that it matches your knowledge and skills. For example, if you worked in a cosmetics sales company and know this business from the inside, its pitfalls, then you should focus on this direction.
It is also necessary to assess the prospects of this business direction. It is likely that the business is being sold due to increased competition and the resulting drop in profitability. It is worth conducting a market analysis, identifying potential consumers and forecasting demand.
Offers for the sale of a ready-made business can be found in print media, specialized business publications, as well as on Internet resources. You can search for suitable projects on your own, or turn to professionals - the so-called business brokers. They may have information about projects for sale that are not available to a wide audience.
At the next stage, it is worth deciding on your financial capabilities, namely, available own and borrowed funds that you plan to invest in the project.
Having selected several projects that suit you, the first thing you need to pay attention to is the reason for selling the business. Many people mistakenly believe that only unprofitable businesses can sell. Of course, it is worth acquiring a company on the verge of bankruptcy, with debts and negative dynamics of financial results only in exceptional cases. Only if you are 100% sure that you can pull out the business and restore stable dynamics. In practice, the reasons for the sale can be very diverse - lack of time for a project, opening a new direction of work, moving, etc.
It is worth requesting the company's financial documentation, considering the dynamics of key indicators. It is also necessary to pay attention to such aspects as the establishment of sales channels, staff qualifications, and the availability of trademark rights.
It is worth purchasing a ready-made business only if you are sure of the correctness of your choice.
