Have you ever wondered if you should buy an existing business or start a new one? It is important to thoroughly weigh your business goals, market opportunities before making
an acquisition and evaluate your risk tolerance beforehand.
This being said, here is a list of “pros” and “cons” of buying a business:
1. Track record: Buying a business gives you an established customer base, an experienced team, an operation mode and a business plan.
2. Financing: The assets of the company you are buying, either inventory, equipment, building, etc. can be used to help secure your financing needed for the purchase.
3. Income: The business already has existing sales and maybe even profits. It takes time for a new company to become profitable.
4. Market knowledge: Acquisition may be a good strategy if you want to expand into a geographic location where you lack contacts and knowledge and/or a new industry.
5. Vendor assistance: Existing owners often help finance the purchase of their business by providing financing.
1. Poor fit: It can be difficult to find an existing business that is compatible with your culture and business goals.
2. Integration challenges: Integrating a new company into your existing operations can be harder than expected. Expected payoffs often don’t materialize as quickly as planned.
3. Vision conflict: It may be harder to impose your vision on a company that already has its own culture and history.
4. Dependence on the old guard: A rocky ownership change can prompt key staff to leave and imperil customer relationships.
Whatever your decision, the project will have a greater chance of succeeding if you have a clear, detailed understanding of why you are proceeding and how the venture will meet your business goals.
Mr. Benoit Brunette,
Centre Entrepreneurship Centre Prescott-Russell,
613-675-4661, ext. 8106
This article was submitted and sponsored by Centre Entrepreneurship Centre Prescott-Russell.
While you are here, we have a small ask.
More people are reading The Review than ever before — across our many platforms. So far, we have not put up a paywall to limit the stories you can read. We want to keep you in the news loop. But advertising revenues are increasingly going to the big two: you know who they are. If you value The Review’s independent, local community journalism, or you value the many ways we support dozens of community organizations in their endeavours, consider supporting our work. It takes time, effort and professional smarts to stay on top of community news and present well-researched, objective news articles on issues which matter to you.
If you read stories on this website, or you have come here from an Instant Article post on Facebook, think about subscribing. It would be a vote of confidence for the work that we do, and for the future well-being of your community.
Latest posts by Submitted (see all)
- Alexandria’s Legion Week raised $1,910 for Homeless Veterans Fund - September 24, 2018
- Open letter to all municipal candidates in Prescott-Russell and Stormont-Dundas-Glengarry - September 24, 2018
- An invitation from Boises Est to basketry, local fibre event - September 24, 2018