Why you might not want to buy a business
The reasons it might not be right for you
Buying a business isn’t always the easy option compared to starting one from the beginning. It takes as much hard work to take over a small business as it does to start one up, and you have to be extremely dedicated. Furthermore, it can be much more expensive than starting a business, especially if you buy a profitable firm that’s performing well, and which comes with advantages such as trained staff and a good customer base. ‘You get what you pay for’ is generally a very true philosophy when it comes to buying a business.
It’s also important to remember that on top of the outright purchase fees come the costs for solicitors, accountants, valuation specialists and other professionals. And if the business has been neglected or run badly, costs are likely to mount up. You may have to carry out repairs, buy new equipment, redecorate and so on to give it a chance of succeeding.
There could be many other hidden problems with an established business — and they could be difficult to find and solve. Although the business may come with staff, easing recruitment worries, they may not be happy with a new boss. The way the business was run previously may mean they have extremely low morale. This leaves you with a big job: you’ll have to find ways of untapping their potential and getting them used to new ways of working.
The previous owner will also have contracts in place that you will either have to honour or renegotiate.
Buying a business can also be a long process. It can take months and months to identify a business that is on the market and suitable to your aims and desires. It’s important to resist the temptation to buy a small business that isn’t what you had in mind just because it’s available and at the right price. Negotiating the purchase can also take a long time, and lots of hard work is involved, mainly around researching the business and the market.
However, if you think you can deal with these potential problems (and let’s face it, nothing worth having comes without difficulties) then buying a business might just be the option for you.