Buying a business is intimidating. It usually means a large outlay of money and a big commitment. You need to know what will be worth spending money for and why. The key to this process is to carefully assess a prospective company as well as your skills and needs. If you do this accurately, your risk drops substantially. Aaron can ensure you make as accurate an assessment as possible.
It is often to your advantage to buy a business rather than start one. The aim of any purchase is to improve your existing holdings. Often this is best done through adding to your current business. And though most people think buying a business is more expensive, this is rarely the case. Starting a business from the ground up involves many unexpected costs. Buying a business usually ends up costing less in the long run.
Another benefit of acquiring a business – if done smartly – is that you should already have a steady stream of customers. As a result of this, your need to market is drastically reduced. Consider how much marketing it takes to get a new business off the ground – marketing a business that already has a customer base requires a fraction of that time and money.
You will want to consider when you need to start operating profitably in order to succeed financially. A new business can take years to run in the red. In contrast, if you buy a profitable business, you get income immediately. You must assess whether the acquisition cost is offset by profits, but again this is something you have the power to analyze and choose. Our experience in business acquisition will help you analyze costs and benefits. If you acquire a business, rather than trying to start something entirely new, you can concentrate on taking a business to the next level. There is far less uncertainty and therefore fewer risks. You are also more likely to be able to get business loans because financial institutions can look at the history of the enterprise and risks are lower.
If you don’t know what type of business you want to acquire, Aaron can help with the decision. Obviously, thousands of types of businesses enter the market every day – from retail stores to auto repair shops. You need to pick the right one for you. You also need to decide if you want to buy a franchise or an independently owned business. A franchise gives you a known name and brand and support and training from the franchisor, but it can be hard to ever operate as an absentee owner because you may not be able to afford a full-time manager and still pay the franchise royalty fee.
Choosing the type of business does not necessarily mean choosing something in which you have a personal interest. If you are too invested in the product, you may not make sound business decisions. Instead, choose a business based on factors like community good will, market saturation, and annual sales. It is vital to assess the type and size of business that would be most profitable for your location and skill set.