Home MLM Evaluations MLM Products MLM Consumer Guides Non-MLM Income Actions You Can Take MLM Research MLM Statistics MLM Regulation Direct Selling/DSA Worldwide Warnings Utah LDS Foreign LanguageTranslations MLM History Short Articles MLM Humor/Satire Sponsor Credentials Recommended Links Contact
CAI
Consumer Awareness Institute
Non-profit Corporation
HOW
TO BUY
AN EXISTING BUSINESS
Starting
a business can be risky, and many people lack the entrepreneurial skill
and vision to make it work. Others find it much safer and more profitable
to buy an existing business. There are many other reasons for buying, as
opposed to starting a business from scratch, including:
- An
existing business (if profitable) may generate cash flow from day one
- Proven
business concept, products, services, marketing and sales strategies
- Established
customer base, providing referrals and references
- Established
suppliers
- Trained
employees in place
- Immediate
credibility and perception of success
- Seller
likely to lend support and may assist with financing
- Easier
to secure affordable financing to complete the acquisition
As with
choosing a job, the best place to start is with yourself. Give some
careful thought to what you need and want out of a business because once
you own it, it can own you. So you had better find a business that you
enjoy owning and managing, at least until you are in a position to hire
someone to manage it for you.
A good
objective for any business owner is to buy a business with sufficient
potential to bring enough income so that you can delegate the management
and other duties to others. Otherwise, it may be just a job with none of
the benefits of the independence of ownership.
Also
consider very carefully what you have to bring to the business. Do you
have the skills to exploit its possibilities? Do you understand the market
for its products or services – and the background and skills to expand
its sales and marketing functions? What are your limitations that may
affect your success?
You may
need some help with appraising the value of the business – aside from
the
asking price the owner has attached to it. If you are not familiar with
how to do this, you may do well to seek the help of a consultant or
business broker.
As
with all entrepreneurial decisions, the key to your success is careful
research. Once you are certain the business is right for you and that
the price it right, go for it. Good luck.
For further suggestions on how to proceed if you are considering the
purchase of a business, go to your local Small Business Association
office, or go to the following web site:
http://entrepreneurs.about.com/od/buyingabusiness/
NOTE:
Some people have a talent for taking over a struggling business,
correcting 
the
problems, and then turning it over to capable new management. These people
are called “turnaround specialists.” Though you may not have
the background to accomplish such a feat, consider your purchase of a
business as an opportunity to take it one step further in its progress.
Just because it is not producing a profit does not mean that the potential
was not there. It is possible that the existing owner lacked essential
skills, lacked vision of what could be done to improve, or was simply the
victim of bad management or market timing. This could work to your
advantage, since a failing business is nearly always sold for less money
than a thriving business.
If you
are considering buying a failing business, you might want to read the
article “Ten
Steps to a Successful Turnaround
A good consultant or mentor can help you sort all this out. Check out carefully the market and the competition. Learn all you can before signing on the dotted line. And don’t forget to get good legal and tax advice.