Buying A Business

The purchase of an established, profitable business with a proven concept, a recognized trade name and a solid customer base offers the least amount of financial risk. Sales, expenses and profits can be verified during a "due - diligence" or inspection period.

Proven cash flows are usually sufficient to service normal debt and provide a reasonable managerial fee for the new owner. The acquisition of a successful ongoing business operation usually requires the least capital outlay and operating capital, the fastest return of investment and the smallest chance of failure.

Often he least expensive way to get into your own business is thorugh the acquisition of an established business, which could be converted to the new owner's management- thereby increasing the profit and sales. Most marginal operations suffer from weak management and poor concepts; many successful business people know that there is no such thing as a bad location, just "bad concepts" and poor management!

Consider the following issues before deciding whether to open a new business or purchase a pre - existing one:

Location: Will the demographics and traffic patterns support the clientele that the proposed new concept will require? What is the availability of desirable commercial space in the area?

Leasehold improvements: Can I minimize my capital requirements by purchasing a pre - existing businesswith minimum cosmetic changes? Is the current signage adequate for the new name? Are the mechanical systems in good working order?

Furniture, fixtures and equipment: Is the current equipment in good working order? Does it pass all inspections necessary to continue to operate, and will the package meet your needs with a minimum cash outlay for new equipment?

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