When you’re looking to own your own business, it’s easy to be drawn towards simply buying an already established one. You think, “All the work is done, I just simply insert myself into this well oiled money machine”. Well, not so fast. Crystal Williams, author of the blog BabeofBusiness.com, has weighed the pro and cons of purchasing an already established business.
To me, the most important question I would ask myself is “Why is this business being sold?”. Think of it as a Christmas gift. The outside packaging may be neat and pretty but you need to remove the wrapping and open the box to see what’s inside. You may just be getting that lump of coal we’ve all been warned about. Read Crystal’s article “Biz for Sale! But Should You Buy?“, where she stresses the importance of doing your homework before you make this important decision.
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Thanks so much for the mention. Love your site! I’m going to add it my blogroll…
There is no substitute for due diligence when buying a business. You almost need to do more research when buying someone else’s biz than when starting up your own from scratch.
Make or buy? That’s always a good question, and the answer is always the same. “It depends!”
I think buying is easier than making, because the existing business has a track record. It’s not to difficult to look for the weak spots in an existing operation.
The pitfall might be that the existing business does not meet your longer term goals or intended use. The key then becomes: how much does it cost, and what do I get from that investment?
All this sounds like buying a used car. But building a new car from scratch would probably present a few issues too.
I can certainly see the appeal to buying a ready made business. However, I myself would miss the excitement that is involved with having my own vision and seeing that vision come to fruition in a business. I think just buying an already established business would take away a lot of that spark.
This is a good question. On the one hand you have a ready made business that you can earn from straight away, on the other hand face possible hardship for a time, but build your business from scratch.
Like Chuck says it is a bit like buying a used car or home for that matter, somewhere down the line it is possible that it will present a problem that you have not expected.