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Buying an Existing Business
Advantages and disadvantages of buying an existing business

If you get it right, there can be many good reasons why buying an existing business could be the right move for you. Remember, though, that you will be taking on the legacy of the business' previous owner, and need to be aware of every aspect of the business you're about to buy.

Advantages

  • Some of the ground work will already have been done in getting the business up and running.

  • It may be easier for you to get finance as the business will have a proven track record.

  • A market for the product or service will have already been demonstrated.

  • There may be established customers, a reliable income, a reputation to capitalise and build on, and a useful network of contacts.

  • A business plan and marketing method should already be in place.

  • Existing employees should have experience you can draw on.

  • Many of the problems will have been discovered and solved already.

Disadvantages

  • You often need to invest a large amount up front, and will also have to budget for professional fees for solicitors, surveyors, accountants, etc.

  • If the business has been neglected you may need to invest quite a bit more on top of the purchase price to give it the best chance of success.

  • You will need to honour or renegotiate any outstanding contracts the previous owner leaves in place.