If you want to own a business, unless you are already fixed on starting your own business from scratch, you could look for an existing business to buy into or purchase. There are a variety of opportunities that come onto the market and as well existing independent businesses, these include franchises, home-based businesses, start-up and multi-layer marketing opportunities. All are possibilities, but your chances of success are clearly best if you buy an existing business or franchise resale which 'ticks all the boxes' in your own list of requirements.
Can we assume that not just any business will do and that you do have some ideas - requirements, expectations and motivation regarding the sort of business opportunity you want? If you are buying a business because you want to try it, or simply because you have always wanted to own your own business, then you had better have money that you are happy to throw at the venture and lose…! Going into business for yourself, existing or new, requires you to have a burning desire and a commitment to take risks and work very hard to achieve success.
Like any opportunity in the business world, there are both advantages and disadvantages around the purchasing of an existing business. However, an existing business or franchise will at least have a track history, which you will be able check. Even if the company was not profitable in the past, your strengths may lend themselves perfectly to turning it into a viable venture. Furthermore, you have the opportunity to look at what the company did in the past that resulted in the current status of the operation.
The advantages of buying an existing business include:
- The business is 'up and running' already with an existing place in the market and a client base.
- The previous owners are likely to lend support and goodwill.
- There is a tried and tested business formula to be taken on and developed.
- There is generally more chance of success than starting a similar business from scratch.
- There is already within the price, the value of the existing tangible and intangible assets in the facilities, plant, machinery and goodwill, etc., and the initial investment to get the business up and running should be less.
- The business as an existing asset already has a cash value, which will be yours to sell on.
- The disadvantages of buying an existing business include:
- A larger investment is usually required.
- Business transfer costs i.e. solicitors, surveys, accountants etc.
- The time and effort required to satisfy yourself about the history, status and potential of the business.
- You may need to adapt your life to fit the business more than if it is yours to model from scratch - where it is and how it operates may not automatically fit with what you ideally want.
- There may be aspects of the business that you feel you have to change quickly - this could be a 'new broom' situation, rather than a 'blank canvas'.
However you proceed towards becoming a business owner, you will need to spend time investigating and negotiating, but at least with an existing business you will have something finite and physical to explore and consider, rather than just a set of ideas or plans on paper!