Why buy a business by starting your own business? Here are ten strong reasons:
1. The success rate of purchased businesses is much higher than the success rate of starting a new business. Just ask your accountant.
2. A guaranteed customer base means fast cash flow! Said Zanele.
3. It is much easier to get money to buy an existing business than to start a new one. Why? See reason # 2 above. Banks are not dumb. They know the numbers. Banks are more willing to lend money if there is an already identified source of repayment.
4. Many retailers are willing to refund on reasonable terms. Why? For tax reasons. They may prefer to postpone any profit for a longer period of time compared to taking one profit at a time. And if the seller is willing to repay any part of the purchase price, it tells you that the seller believes the business will continue to prosper under your management.
5. Beginning guessing is just a learned guess. Estimates of existing businesses for sale based on historical results. Which is the most reliable?
6. Regular startup, I repeat, ALWAYS more expensive to launch than expected. With the money you end up spending to start that new business (which may or may not be successful) you could probably buy an existing business with instant cash flow.
7. You may need to come up with a lower payment and operating fee when you buy an existing business than you would need if you started your business. Why? With the financial support of the owner and the working record, your existing business purchase can be very bankrupt. A new start can't be too bankrupt. The amount required for a new business to have cash flow positive is unknown. And it eats cash.
8. Verified website presence. Although each business will be different, most businesses rely to some extent on the business website. If a website is built for a long time, and if the site gets more people, search engines put a higher value on that site. This is important as the ranking of your website determines your position in search engine results. In other words, building a new website is not enough. Customers still need to get it. A standard, fixed website can become a real asset, something a new launcher may not have.
9. Most of the businesses listed are actually priced. One can find a retail business that will sell three to four times the cash flow. Think about it. Four times the cash outflow equals 25% annual return on investment. 25% will close all credit services and still leave the investor a decent return.
10. Minor brain damage. Just ask anyone who has been bullied about starting their own business. You always wonder if customers will really come.
Think about it. It really is an easy decision.
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