The advantages and disadvantages of buying an existing business
The advantages of buying an existing business are it comes with existing customer base and the business is already functioning operation. You do not have to start from the ground up. The disadvantages include the difficulty of changing the business’s image, the outdated inventory, equipment, unsatisfied location, liabilities for previous contracts, etc.
How to find a business for sale
There are several sources to find a business for sale. You can find it on newspaper advertising, Craiglists.com, word of mouth through friends and family, bankers, lawyers, accountants, business brokers, internet search, etc.
The means of measuring a business’s condition and determining why it is being sold
When a
The difference between tangible and intangible assets
Tangible assets are those that can be seen and examined. Real estate, inventory, and equipment are important tangible assets. Intangible assets, though unseen, are no less valuable. Goodwill, leases, contracts, and patents, copyrights and trademarks are exmples.
The price to pay for a business
The offering price to pay for a business is calculated by adding the adjusted value of tangible assets to the value of intangible assets (including goodwill, if appropriate)
Factors important when finalizing the purchase of a business
Once the price of a business is agreed upon, the terms of sale need to be negotiated including setting up installment provisions and thinning of the assets. Before the closing date the buyer puts an agreed upon amount of money into an escrow account.
My View: Taking over an existing business is a lot like founding your own. The big difference is that you do not have to start from scratch. You take responsibility for an organization that already has its own strength and weaknesses. Many years ago, a group of thirtheen of us bought out an existing support service business. We all have great technical experience in support the customer base. Since we have an in-depth understanding of the business, its structure, and its business nature. We did fairly good in the business.
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