Going for an established business than setting up your own, has many advantages. However, there are few disadvantages of buying a business as well. So, if you are planning to buy an existing business, then you should know about both the pros and cons and should also be clear about your skills and abilities of running it.
Advantages
Many people think that buying a business is less risky as compared to setting up a new one, especially when you a buy a business that is running on profit and has well managed staff and you get everything at the right price. It has the following advantages:
1. You are not required to design any start up plan or hire people and hit the floors. The plans and procedures are already in place and that is really a big advantage.
2. It also means an immediate cash flow.
3. The business has been in the market for few years if not more and hence, has its own financial history and you can every well understand what to expect and what not to not expect from it.
4. You will ready have an existing customer base, goodwill, contacts, equipments and even a market.
5. Employees and managers have experience of running the business and their knowledge might become useful to you.
Disadvantages
It is not mandatory for every business to have a good prospect and when you are buying an unprofitable business for a low price, it has its own risk elements. Some of the disadvantages are:
6. You might be required to make huge investments to replace old equipments and machineries.
7. You might also be required to hire new staff as the existing staff is not upto the mark.
8. Unprofitable businesses also need investments to become profitable.
9. External factors like declining industry and increasing competition can also be bad for the future of the business.
For more details please visit at http://www.businesshunters.co.za/
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