Buying a business is one of the most important decisions you’ll ever make – and one not to be rushed into.
There are a number of options open to you.
It’s important you do your research to make sure you’re buying the right type of business for you and that you pay the right price for it. A professional business broker is a great resource to help throughout the process.
Buying an existing business may be better for you than starting from scratch. The main reasons are it can take you twice as long and it can cost twice as much to start a band new business.
Some of the benefits of buying an existing business include:
• Immediate sales – As soon as the deal closes, you could be generating income from the first day, if customers are invoiced.
• Easier to get credit – Banks are more comfortable lending to existing businesses.
• Staff and systems – It can take many months to find and train employees and set up processes to operate a business.
Once you’ve established that buying a business is the right road for you, it’s time to decide what kind of business is right for you: a franchise or an independent business.
There are pros and cons to both.
Generally, franchises have a proven concept. They are established businesses that have grown successful enough to require more locations. That also means they have an existing customer base that’s familiar with the brand.
Franchises often come with help for setup and training. The parent company already has things like equipment, uniforms and advertising in place, saving time and money developing your own.
On the negative side, there are rules and regulations to follow, so you won’t have total autonomy. You’ll also have to pay a percentage of the revenues to the parent company.
With a traditional business, you’ll have much more control over rules and processes. There are no fees to pay and the revenues will stay with you.
You set the direction of the business, which means that you can be more flexible in taking advantage of opportunities that open up in the market.
However, the risk can be greater, too. The fate of the business rests entirely on your shoulders.
When it comes to deciding what type of business is best for you, it’s important to evaluate your own background and characteristics.
Ask yourself what kind of risk you’re comfortable with, what industry your skillset best lends itself to, how well you can manage people.
At Business Finders Canada, we’ve developed a proprietary buyer profile that will give you a greater chance at success. Contact us for professional and experienced help.
For experienced advice, contact Business Finders Canada now at 1-888-377-8009.
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Online: Canada Business Network
Photo: Rich Brooks/Flickr