Business

Business Tips & Info

Buying an Established Business

Some people feel that buying an established business is a reliable short-cut to becoming a successful entrepreneur. The existing business offers many advantages such as an established business method, clientele, profit picture, perhaps premises and inventory and very often a reputable name. However, one very important question must be answered; why is the business for sale?

As with any short-cut, however, there is a price to pay, and in this case there are really two "prices". One is money, and the other is time and effort. If you buy a prosperous business, the money you give for goodwill (the good reputation of the business) is paying for these advantages. This may be money well spent. On the other hand, it may be money wasted if the business is really failing or has unforeseen problems.

Before purchasing a business, insist on reviewing financial statements for as many previous years as possible (up to five years). Obtain lists of clients or customers and suppliers. All leases and outstanding contracts must be reviewed. The decision to buy should not be made lightly, get professional advice (an accountant to review financial information and a lawyer to review leases, business contracts, etc.,) before purchase agreement.

Each year many small businesses are bought and sold. A lot of key issues must be considered before you complete the final purchase.

Two of the most important issues are the following:

Why is the business for sale?

How much should you pay for the business?


ADVANTAGES:

Limited risks.

Success of the business location has been proven.

Cash flow begins immediately with sales to established customers.

Employees may already be trained and knowledgeable.

New owner inherits the goodwill and reputation.

Inventory already exists and suppliers are known.

Relationships with suppliers, bankers, and so on, are established.

Business is equipped and furnished.


DISADVANTAGES:

Location, if not satisfactory, is difficult to change.

Potential for decrease in sales because owner's departure could result in loss of loyal customers.

Some employees who stayed with the business may not be assets.

Inventory may be out of date, overpriced, or not to the new owner's liking.

Business may require expensive modernization.

Seller may have hidden reasons for selling business.


Related Links:

The Accountant

The Banker

Other Professionals

Business Guide

Factors to Consider

Your Product or Service

Protecting Your Product or Service

Your Customers

Glossary of Business & Financial Terms

Ratio Analysis

Financing

Sources of Business Financing

Determine Cost

Web Design

Web Hosting

Defusing Difficult Relationships

Being a business owner can sometimes test you patience. Cranky employees and difficult customers can sometimes make you feel like you are a magnet for attracting frustrated people and problems. In order to survive and keep your sanity in going forward, address all factors that affect your business with a strategic and patient approach. Remember the first golden rule of conflict resolution: "LISTEN AND KEEP YOUR COOL." The second rule is: "BE PLEASANT AND KEEP AN OPEN MIND." The third rule is: "ACCEPT RESPONSIBILITY, SHOW EMPATHY AND OFFER APOLOGY IF YOU MADE MISTAKE OR CONTRIBUTED TO THE PROBLEM." How you respond can make the difference between solving the problem or losing.



Accept responsibility
rather than blaming someone else
Let difficult people know
you can see their perspective
Keep your cool
show empathy and apologize

Did You Know?

It doesn't take a fortune to sell your products and services on the Internet. It just takes some knowledge of what your customers want and how to find a way to present your sales solution to them.

For business people either selling products or promoting their services on the Internet, the importance of attractive, fast, usable sites can't be overstressed. Much like a counter person or storefront, the appearance and function of a business' website conveys an image of the company to the customer.

Your website is your image on the Internet. That image can either be good or bad, and bad images don't sell. Adhering to a few common sense web design rules can help with the public's perception of your company and increase your sales. Find out more...