Buying an Existing Business vs Starting a new one
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- Опубліковано 15 лис 2022
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As mentioned the Advantages and Disadvantages
START-UP (Advantages)
Cheaper (but not always)
You can create your own culture
You get the choose the employees
No legacy Issues
You get to shape the business the way you prefer
You can grow organically to keep debt under control
Freedom and sense of achievement
Control your own hours
Potential to earn more money
START-UP (Disadvantages)
Start marketing (zero customers)
No policies and procedures
No accounting software and systems
No business structure
Need to hire new people
Find Suppliers
Build customer base
No Cash-flow (initially looses money)
No track record nor reputation nor brand
Upfront costs
High failure rate
Negotiate lease
BUYING an EXISTING BUSINESS (Advantages)
Existing customers
Existing cash-flow and Profits
Proven business model
Trained employees (Existing Suppliers)
Easier to finance (Financials)
Proven Track record
Existing Brand (Website & Social Media)
Existing Assets (Cash or Trademarks)
Greater chance of success
Existing infrastructure
Market tested Products and Services
Reduced start up time
Can focus on growth (less work and risk)
BUYING an EXISTING BUSINESS (Disadvantages)
Can be expensive to buy
Not easy to buy at a discount
Not your culture
Goodwill can be linked to previous owner
Unknown Liabilities
Old Systems
Uncooperative employees
Old equipment
Obsolete Inventory - Навчання та стиль
This is Gold information. I’m an entrepreneur but I’ve never looked at it this way
Hi Julius it also took me a while to see the benefits of buying an existing business. It is definitely the way to go for experienced business people. My advice is that you should investigate at least 20 businesses before committing to a viable offer. Also make sure that your puts you in positive cashflow from day one. If this is not possible then walk away from the deal.
VERY GOOD INFO!!!! great share- thanks, i look forward to your next video.
Awesome, thank you!
Informative and clear video with some great advice. Thank you for sharing :)
Glad it was helpful!
This was incredibly helpful in my decision to buy an existing business, thank you so much!
That's wonderful, thank you for the compliment and good luck with your new venture.
Thank you so much for this! I’m thinking of becoming an entrepreneur, so I was glad I came across your video
You're so welcome!
Love it . Very useful and abstract
Glad you like it!
Thank you for the information
My pleasure
I like the fact that on both sides you showed advantages and disadvantages. There is a manufacturing business I want to start, but there are none to be found in SA that are on sale. Does that mean I should start that business or wait to purchase an existing one?
Passion for a specific type of business is a strong motivator, so it you have a clear and viable business plan then I would follow your passion. Manufacturing in South Africa is tricky a labour is expensive and over regulated. Having said that I would try and grow the manufacturing business organically with least amount of debt in this current environment with high interests rates. Good luck, fortune favours the brave.
This is great information. Thanks. I never thought that buying an existing business is an option. The greatest hurdle I guess would be to finance it, but as you say, the risks are lower, to potentially easier to finance. My first thoughts would turn to an investor as they are generally more less risk averse than banks, but would then own equity. Banks seems like a reasonable alternative if the business fits their risk profile. I have a startup building software, but in the early stages. It's not too late to consider buying an existing business. Would you go to the main high street banks for financing and where would one start to look for existing business that are for sale?
Hi there, finding finance for a good deal is the easy part. The effort "luck" is in finding the right deal. You could try business brokers but the price may be too high as they earn a commission on the sale. You should look at many businesses but the key is to be cashflow positive from day one.
Thank sir , I've been saying and wanting to do this, buy should start a holdings company to buy it
Hi Christophur, I agree I would also recommend purchasing a business using a Pty. Please watch this video. ua-cam.com/video/_CAYSrmUSjk/v-deo.htmlsi=ZtmnDJcX4O-S7PCd for more information on the benefits of trading in a Pty. Maybe you should also look at this one on holding companies. ua-cam.com/video/PAoQOwyenuE/v-deo.htmlsi=fhvauDd6vQ1oZXWm It many not be necessary to have a holding company structure for now. Good luck with your decisions.
@@swiftregto reduce risk , is start a pty a good start to separate myself from entity and debt .
Is Owner Financed used much as a financing option in South Africa?
I would suggest that owner financed is used in the majority of cases.