Business Sales: Nikki Sells Her Retail Business – The Pros of Buying an Established Business and Things to Look Out For
Nikki Sells Her Retail Business – The Pros of Buying an Established Business and Things to Look Out For
If you're thinking of buying an established business, there are a lot of factors to consider. On the one hand, buying a business that's already up and running can save you a lot of time and money. On the other hand, there are some risks associated with buying a business that you should be aware of before making any decisions. Below we will break down some of the great things about buying an established business and the things to be aware of so that you can make an informed decision.
The pros of buying an established business:
1 . You're buying a proven concept. When you buy an established business, you're buying a concept that has already been proven to be successful. This means that you can hit the ground running and start making money right away.
2. An established business will have existing customers. This means that you'll have a built-in customer base from day 1. These customers will already be familiar with the products or services that your business offers and will be more likely to continue doing business with you after the sale.
3. You can benefit from the previous owner's mistakes. One of the benefits of buying an established business is that you can learn from the previous owner's mistakes. This knowledge can help you avoid making similar mistakes and help you grow your business even more quickly.
4. The price is often lower than starting from scratch. When you buy an existing business, you're often paying less than it would cost to start a similar business from scratch. This is because the previous owner has already invested time and money into developing the infrastructure, marketing, etc.
5. Staff may already be in place. If you buy an existing business, there may already be staff in place. This can save you a lot of time and money in the long run because you won't have to go through the process of hiring and training new employees.
6. Financing may be easier to obtain. It can be easier to obtain financing when buying an existing business because lenders will view your loan as less risky than if you were starting a new business.
7. When you buy an existing business, you may also get valuable assets such as inventory, equipment, furniture, etc. This can save you a lot of money because you won't need to purchase these things separately.
When purchasing an existing business, it is important to be aware of:
1. There may be hidden issues. One of the risks of buying an established business is that there may be hidden issues that only become apparent after the sale has been finalised. For example, the financial statements may not be accurate or there could be pending lawsuits against the company. It's important to do your due diligence before signing any paperwork so that you're aware of any potential problems down the road.
2. The current owner may not be forthcoming about all aspects of the business, including its financial situation, employee morale, etc. Be sure to ask lots of questions and get everything in writing before finalising any deal.
3. You might not get what you expect. Once again, it's important to do your due diligence before buying an existing business so that you know what exactly you're getting yourself into. Be sure to inspect all aspects of the business, including inventory levels, equipment condition, employee contracts, etc., so that there are no surprises after the sale has been finalised.
When Nikki contacted Bonza to sell her online retail business she was made aware of the process, what information was required to assist in selling the business and how best to prepare her business for the sale process.
The team at Bonza include the preparation of a detailed business profile document to give to Nikki’s buyers after a confidentiality agreement is signed and received. This document aims to clearly outline the business opportunity in a thorough, yet easy to understand format so that the buyers can see what is involved and it helps them to decide quite quickly whether the business is worth further research.
Although we are working on behalf of the seller, we ensure that full support and advice are provided to those buying the business too. This not only helps the buyers to feel comfortable moving forward but also can potentially progress the sale process faster.
Nikki was able to sell her business through Bonza at 3 times multiple in 77 days! There was also a total of 33 enquires in this short amount of time. This result not only shows how popular purchasing an existing business is but also how Nikki’s hard work and success can benefit you when it comes time to sell.
There are both pros and cons to buying an existing business. As with any major decision, it's important to do your research and weigh all options carefully before jumping into anything. If you have any questions at all about the process of buying or selling a business then feel free to reach out to us today for an obligation free chat.
