When a person makes the decision to go into business for themselves, the first question they will ask is, ‘should I buy a business for sale or start a business from scratch’. Particularly in today’s current economy this is a decision that needs some careful thought.
Whether you are being made redundant, at the end of your employment contract or simply looking for a change, the biggest incentive for self employment is the fact that the sky is the limit! My father always told me that I would never get rich working for someone else. Being self employed might also be your only option in the current economic downturn, so choose wisely before committing to a business venture on your own.
When starting a new business, more often than not the new business owner will need some sort of start up money, and with interest rates at an all time low, there couldn’t be a better time to seek financial assistance from a major lender. Depending on your needs, there are different types of business loans to choose from. Your accountant will be able to point you in the right direction.
Many successful businesses and major corporate companies in today’s business world were developed in tough economic times, so do not be deterred from starting your own business just because of the negative press our economy is receiving.
Buying an existing business for sale is deemed as a much safer option. Buying an existing business with a steady income is obviously a more practical solution however these businesses usually come at a price. The current owner will be able to show you financial records of all profit and loss information.
An existing business will also have experienced staff already in place. Finding reliable, trustworthy staff can be a long process and having staff already in place is one less problem you have to worry about.
That being said, with the current economic crisis, you may be able to find yourself a good deal with an existing business for sale that is experiencing financial crisis. When negotiating a price, try and get a feel of the owner’ body language and sense whether or not he is after a quick sale. If yes, than make an offer well under the asking price and wait a few weeks. You never know your luck.
When negotiation are taking place, remember to include your loan repayments in all of your calculations, wages, overheads, fuel, outstanding debt, product, etc, etc. Not doing this would almost certainly see your budget blow out resulting in a financial crisis of your own.
Whether you decide to buy an existing business for sale or start up a business from scratch, you should always seek legal advise from your solicitor and accountant. They will be able to guide you through the whole process as smoothly as possible. They will also be able to help determine the value of an existing business and while making sure you do not overcapitalize in the process.