For many potential business owners, it makes more sense to buy an established business than start their own from the ground up. However, while you stand to inherit the good things about an established company, such as a loyal customer base and working practices, you might also inherit the bad.

If you’re thinking of buying a business there’s quite a bit of research that needs to go into the process. Everything from the potential market to the products and services involved should be considered, not to mention the previous business owner’s plans and records. As one of the most serious investments you’re set to make in life, you need to consider every aspect and weigh up the good and the bad.

The Advantages

Provided you’ve done the research and are certain you’re buying a well-managed and profitable business, there are quite a few advantages to doing it this way rather than setting up your own.

• You’ll receive immediate cash flow from it;
• You’ll get everything that comes with it including customers, staff, equipment, plant, goodwill, and stock;
• You already have a solid and established market for your product or service.

The Disadvantages

Although it’s considered less risky than starting a business from the ground up, there are still some disadvantages of which to be aware. Consider these points before you move forward with purchasing an established business.

• The business might require upgrades on tools and equipment;
• There may be poor management or staff situations in place that led to the original owners hoping to sell;
• You may need to invest a lot of your own cash up front just to get the business to a stage where it’s profitable.
• The business may have a bad reputation in some sectors or with some clients – which you will need to overcome.

Where to Next?

Once you’ve weighed up the good and bad of your potential purchase, where do you go from there?

Before all else, you should have the necessary finances to buy the business and keep it operating, as well as a solid understanding of the skills required to make it a success. Your potential purchase should match your own goals, skills, and finances so that you can continue to run it as successfully as the previous owner.

For an in-depth discussion on your finances and whether purchasing a business would be right for you, contact our team at Hart Partners. With an experienced team behind you, you’ll be able to assess the financial health of your proposed purchase as well as your own personal situation.

If you are in Victoria, and Melbourne in particular, we invite you to call us today on 03 9600 3220 to see if we can make your dream a reality.