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 Advantages and Disadvantages of Buying an Existing business

On October 19, 2015

 Advantages and Disadvantages of Buying an Existing business

There are many good reasons why buying an existing business could make good business sense.

However it is not without risks and it is important to be aware of every aspect of that business and the legacy left by the previous owner.

Advantages of buying an existing business

  • Groundwork – the setting up of the business has already been done
  • Finance – it should be easier to get finance for an established business
  • Market place – a need for the product or service has already been established
  • Goodwill – you should inherit ;
  1. an established customer base
  2. a reliable income,
  3. a reputation to capitalise and build on
  4. a useful network of contacts.eg suppliers
  • A business and marketingplan should already be in place.
  • Stock and Equipment – an existing business will have sufficient stock for the short term and all the equipment required to run the business
  • Employees – retaining existing staff not only saves time and money on recruitment, but theyshould have experience they can share
  • Problems – most issues will have already been identified and resolved.

Disadvantages of buying an existing business

  • The reasons why the current owner is selling – what impact does this have on the business
  • Finance – a large amount of capital will be needed for cash flow and for professional fees for solicitors, surveyors, accountants etc.
  • Investment – if the business has been neglected, more investment maybe required to make the business profitable and successful
  • Contracts – those set up by the previous owner will need to be honoured or renegotiated
  • Stock and Equipment- some stock may be damaged or obsolete, old equipment may need to be replaced
  • Employees – staff morale maybe low if the business has been badly run or they are not happy with the news boss
  • External Factors – future growth may be affected by increased competition, or a decline in the industry

When buying an established business, we at Peter Robinson & Co. will provide a service with all the necessary expertise to meet your requirements.

Whether the business you are considering is large or small, with 30 years of experience in commercial property law, you can be confident that Peter Robinson & Co. will deal with your matters in a professional and efficient manner. Please call Peter Robinson & Co. today to discuss your requirements.

Call Peter Robinson & Co. now on 0161 678 7996.

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