Would you buy an existing business?
Discussion
Assuming you had a lump sum and wanted to work for yourself of course, would you buy a business that was started by somebody else?
What are general reasons for and against this kind of thing?
I see there are no shortage of them for sale on websites, just wondering what peoples thoughts were.
What are general reasons for and against this kind of thing?
I see there are no shortage of them for sale on websites, just wondering what peoples thoughts were.
I often thought the same, and could never understand why you would want to buy somebody else's small business when it's so relatively simple to set up your own.
Doesn't bode too well for when I look to sell, but then I'm hoping to go out to a corporate rather than private investor.
As for buying, I wouldn't bother, I would find out as much as possible about the business and set up in competition.
Doesn't bode too well for when I look to sell, but then I'm hoping to go out to a corporate rather than private investor.
As for buying, I wouldn't bother, I would find out as much as possible about the business and set up in competition.
The way I seem to see it is that a majority businesses for sale tend to be ones where there are problems. I did look into this route for a little while, but as Nic has said, I'm just finding it easier to set up on my own. That way I know all there is to my business with no hidden gremlins. I guess there is more of an opportunity to do better this way. Maybe it's just me.
maser_spyder said:
I often thought the same, and could never understand why you would want to buy somebody else's small business when it's so relatively simple to set up your own.
Doesn't bode too well for when I look to sell, but then I'm hoping to go out to a corporate rather than private investor.
As for buying, I wouldn't bother, I would find out as much as possible about the business and set up in competition.
Its only easy if you have drive, determination and imagination. Most people wouldn't have the first clue about building up a list of customers, suppliers, trade contracts, getting premises, hiring staff etc. For a lot of people its simpler to buy a business. Equally well, it doesn't mean they will have the first clue how to run the business when they do buy it, but who cares once you've sold it.Doesn't bode too well for when I look to sell, but then I'm hoping to go out to a corporate rather than private investor.
As for buying, I wouldn't bother, I would find out as much as possible about the business and set up in competition.
I sold my previous business without too much trouble. There was no rom for expansion which is why I sold, but it was a good going business which would give someone a reasonable return for years to come. The nature of the business and where it was means it would have been impossible for anyone else to set up a similar business, as proved by the three people who tried and lasted less then a year.
Businesses that come with premises integral to the business are generally easier to buy than start anew as well, e,g, garages, guest houses, hotels, yacht clubs.
Really depends pn what sort of businesses we are talking about.
The business I work for really does have excellent potential for growth which has never been exploited. It also has a very good base to build upon (albeit with a few gremlins). It has been family owned for over 70 years and I'm sure there's an element of it being a 'lifestyle' business instead of being completely commercially focused.
They will more than likely be selling it at some point as one of the MD's is 70 and there are no family members showing an interest. If I was in a position to buy it alone or via a management buy out, I would give it serious consideration.
They will more than likely be selling it at some point as one of the MD's is 70 and there are no family members showing an interest. If I was in a position to buy it alone or via a management buy out, I would give it serious consideration.
I am looking to either buy an existing business or setup on my own and have been looking that this for a while.
My thoughts are that setting up on my own is much harder for some people (like me) who are office based and not in sales/marketing ie no clients to take with them to the new business.
Buying an existing business seems a better route to take as hopefully the business will be doing ok with cashflow and clients (very important)
The biggest issue with buying an existing seems to be the reasons for selling, retirement or ill health ok but other business intrests worries me.
Good luck
My thoughts are that setting up on my own is much harder for some people (like me) who are office based and not in sales/marketing ie no clients to take with them to the new business.
Buying an existing business seems a better route to take as hopefully the business will be doing ok with cashflow and clients (very important)
The biggest issue with buying an existing seems to be the reasons for selling, retirement or ill health ok but other business intrests worries me.
Good luck
I would guess that reason for sale is the most important factor.
My father bought a b&b, he did this because the current owner was running it at half pace because he was old and had not got the help. No suprise my father that knew nothing of the hotel/accomodation business prior to spending 600k on this place has turned it around and making a very healthy profit from it, as well as having a home.
My father bought a b&b, he did this because the current owner was running it at half pace because he was old and had not got the help. No suprise my father that knew nothing of the hotel/accomodation business prior to spending 600k on this place has turned it around and making a very healthy profit from it, as well as having a home.
One of our clients only buys businesses that are on their last legs, days before they are about to go bankrupt. He chooses ones that have a stong client base and reputation but have become bloated with excess staff or have poor financial control. He buys them for a very small amount and then goes in with his big axe, chops off the problem parts (which the original owners didn't have the insight/heart to do) and turns them around very quickly. The project we are working on with him has gone from £1m+ in debt 18 months ago to being in the black today and growing at a frantic pace. He goes through many sleepless nights but it does look like a lot of fun.
Dick Dastardly said:
One of our clients only buys businesses that are on their last legs, days before they are about to go bankrupt. He chooses ones that have a stong client base and reputation but have become bloated with excess staff or have poor financial control. He buys them for a very small amount and then goes in with his big axe, chops off the problem parts (which the original owners didn't have the insight/heart to do) and turns them around very quickly. The project we are working on with him has gone from £1m+ in debt 18 months ago to being in the black today and growing at a frantic pace. He goes through many sleepless nights but it does look like a lot of fun.
I have thought about this route. Where are such businesses advertised if you dont mind me asking (pm me if you like)Thanks
I started my Loan and Mortgage company 8 years ago. My answer is yes - I would buy an existing business. I have just purchased (6 weeks ago) a Recruitment company which has been established for 3 years, looking to build upon what is already in place rather than start from a blank sheet of paper.
As a result I have the loan company up for sale, no negatives with the Loan company but really wanted a fresh challenge as I have been in Finance far too long. As with all business for sale, there will be a proportion of genuine reasons for sale (such as mine!).
It can take some time to build up clients, contacts etc and the money needed to support you over lets say 12 - 18mths as well as running/marketing costs etc may have been better spent buying into something existing. Pro's and cons to both I suppose.
As a result I have the loan company up for sale, no negatives with the Loan company but really wanted a fresh challenge as I have been in Finance far too long. As with all business for sale, there will be a proportion of genuine reasons for sale (such as mine!).
It can take some time to build up clients, contacts etc and the money needed to support you over lets say 12 - 18mths as well as running/marketing costs etc may have been better spent buying into something existing. Pro's and cons to both I suppose.
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