If you been wanting to have your own business company but have no interest to begin the new one from the scratch, taking the ownership of an existing company might be the suitable choice for you to become a business owner. There are many benefit to buy an already establish business company rather than build it from the start.
One of the biggest advantage is that you do not have to spend a lot of effort and time to take care the company. The acquisition of a business company often consider as a short cut to enter a business, where you take other people hard work, effort and sacrifice in building the company.
Since you will be taking other people effort, blood and sweat, the acquisition will cost you a lot of money. This will be the biggest disadvantage in business acquisition. Due to the emotional attachment to their business, the original owner of the business company often tend to overestimate about their market and business value.
Therefore you must perform proper research and also professional advice to make sure that you spend fair price for the business that you want to take over.
But, before buying the existing company, it is necessary to remain cautious so the business acquisition do not become a waste of money since the acquisition is actually is not an easy alternative to own a business.
Before you start searching for potential business company either to buy to enter new market segment or to expand your old business, it is important to get a good accountant to consult about various aspects of the acquisition you are about to make. A good accountant will have good and in-depth knowledge and information that are useful to help you smooth the acquisition process.
You also need to think about the other side that make the business that you want to take look promising. For example; the company may have loyal client that give good profit to the business. But, those clients might associate their purchase with the goodwill or relationship with the previous owner and they could stop continuing their trade with the company after you purchase the business.
Other thing that you should consider is the reason why the business is put on sale. There are various things that make the company is on the sale list such as the owner has hidden debt or personal problems which will not showed to the company balance. So, you need to perform thorough investigation.
You need to check the business profit projections and trends to make sure that the company will continue its operation and keep making profit after you bought it. Investigate its cost and sales, along with its complete assets. When investigating these things you should accompanied by your accountant, so they can provide advice for you to make the right decision about the purchase.
Unlike starting up a new business which is you have to build on your own according to your own goal and vision, already existing business already involve the live other people in the business, and you must able to make adjustment between the previous goal and vision with yours.
So, even though it is easier to buy already established business company, the company situation after the purchase often not flexible enough since you will be continuing other people goals and visions.
Taking over the already existing business is different compare to buy second hand good such as house or car. It require proper handling and research to avoid over estimated.