Thu 1 May 2008
If you are thinking about starting a new business, one of the easiest ways to do so is to take over a company that is already established.
Buying a running business has several advantages — and one of the biggest is that you will be spared the hassle of setting up your business from scratch.
However, there are some factors that you need to keep in mind when you take over a running business.
Here are a few of them:
Why Is The Business Up For Sale? You will need to find out why the seller is selling the business in the first place. Is it due to retirement, a location change — or is the business about to go bust?
You should do a survey to find out the real reason behind the seller's decision. Do not just take the sellers word without checking it out.
What Is The Seller's Reputation? You should get information from some of the seller's customers and their suppliers as to their reputation.
That will tell you whether they are honest in their dealings, if they have a good standing with their customers and whether they pay their suppliers on time.
What Is The Financial Status Of The Business? You should find out if the business is financially sound or whether there are any outstanding debts that would be passed on to you if you purchased the business.
Finances (or lack thereof) are one of the main indicators of whether a business is successful — or not.
Have your accountant check out the financial status of the business.
Purchasing an established business certainly has its advantages. However, you need to do your homework to ensure that you will have every chance of being successful.