Sep

04

Checklist: buying a business

Posted by : Felix Polding | On : September 4, 2019

Why is it that some people decide to buy an established business rather than starting from scratch? That is because there are advantages when buying an existing business. However, you also need to learn the disadvantages so that you’ll know how to make it grow and succeed.

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Buying an existing business

The most obvious advantage of buying an existing business is it saves you time, money and energy. Unlike starting from scratch, you don’t have to undergo the lengthy process of researching and creating business plans and models because these have been done for you. In addition, it is not as difficult to obtain since lenders are more likely to finance a business with a proven track record if there is financing needed for your purchase.

Most times, especially in a turnkey or franchise, everything is included in the purchase. It is very beneficial for you to inherit the infrastructure that has already been established by the previous owner(s). This not only includes the customers, but suppliers, employees, equipment, and systems as well. It is a good possibility that the previous owner(s) may offer some insight and assistance, thus making the transition easier.

Moreover, cash flow most likely starts immediately unlike when starting a business from scratch where your timeframe is unknown. Profitability is not in question as it would be in a startup. An existing business is probably producing a decent income and also has a solid client base established. Therefore, you maximise the chances of success of your business.

Another great thing about purchasing an existing business is that there will still be room for innovation and creativity, even though the business is already established. It will be easier for you to be creative and innovative since the business already has a good foundation.

Now that you’ve already learned the benefits of buying an existing business, are you ready to begin the purchase? To learn how to properly do this process, read this: https://www.business.vic.gov.au/setting-up-a-business/buy-a-business/checklist-buying-a-business