If you know what to look for and how to buy a small business , buying an existing operation can be a great opportunity to step into the company without having to start from scratch. If you buy a turnkey operation , you can skip the startup phase entirely and begin operations as soon as the sale is complete; everything is already set up and ready to go. Unfortunately, businesses for sale are like used cars; there are lots of them out there, but some of them are lemons. Here's how you can tell if that small business for sale is a good deal or a clunker. In other words, before you buy a business, discover the real reason the small business is for sale.
Writing the Franchise Business Plan
Business Plan for Buying an Existing Business | Wise Business
In theory, the franchise concept is a brilliant business model. However, buying a new franchise does not guarantee success. It is, for the most part, a concept that has proven effective in some areas under certain conditions. Given the generally dismal failure of start-up businesses , there is another option if you wish to buy a franchise: buy an existing franchise. But just because the purchase price is going to be lower than the cost of starting a new franchise, does not mean the franchise is a good investment.
6 Factors in Taking Over an Existing Business
One of the most important exercises to go through in the startup of any business is the creation of a business plan, and this is just as true with franchised businesses as with any other. The discipline of preparing the business plan forces you to anticipate and think through a number of questions about the challenges you'll face and the expectations you have for your new business. The creation of your business plan is also essential if you need financing from any third-party source, since this is probably the first document any such financing source will ask you for. In a franchise business, you'll probably find that the preparation of the business plan is substantially easier than for any other type of independent business startup. The franchisor typically has a great deal of verbiage readily available to include in the narrative portions of the business plan, and also includes much of the financial information you'll need in the Uniform Franchise Offering Circular UFOC disclosure document.
Buying an existing business has many advantages over starting an entirely new one. Existing businesses typically already have employees, clients, inventory, processes, cash flow, and historical financial performance. While operations can begin right away, buying an existing business presents several challenges that should be understood before you begin the process. How much should I pay for a specific business? What professional assistance do I need?