Many of the problems associated with a start-up can be avoided by buying an existing and currently trading business. A successful business will have demonstrated the ability to attract customers, control costs and operate profitably.
Additionally, it may be possible to buy an ongoing business at a bargain price. While this option may appear to be attractive, the prospective entrepreneur would need to ask a number of questions before deciding whether or not to buy. Some of the most important questions are as follows:
- Why is the business being sold?
- What is the present physical condition of the business?
- What is the status of the assets of the business?
- How many of the staff are going to remain?
- What type of competition does the business face?
- What is the financial state of the business?
Due to the many commercial, legal and taxation implications of buying an existing business, satisfactory answers are needed to these questions. Ideally, the would-be entrepreneur should look at businesses that are well-established in the marketplace, with tried-and-tested products and services.