Buying a business

[mike]

I'm thinking of buying a business and vendor finance is an option.

What are the advantages/disadvantages of this ?

[Coffs_Hacker]

My advice would be buy an excisting business as a last option.

setting up a business is harder but if it works then it is more financially benefitial in the long run(less up front costs, smaller loans, and able to sell at a price higher than what it took to set up). On the other hand if it fails then u don't loose as much as most businesses are sold with a goodwill factor included.

Secondly - have an exit strategy. This is a trap we have fallen into. Have a way on how to get out if something goes wrong (illness, poor trade, loose interest in the business etc).

thirdly - Get your accountant and solicitors to go through everything for from the books to the lease etc.

1 adv to buying an existing business is the clientelle base is already there and u can make money from the start (so long as the business u buy is already making money)

Hope this helps


PS wanna buy a business making heaps of money (i have one for sale)

[Webster]

It depends on the type of business, and how the vendor finance is structured.

[rocket]

I would say the same as Jack, Typically if vendor finance is offered its only because they can't sell it outright, secondly think of the seller as Allan Bond, don't believe a word he says, about anything, have your accountants go over everything, if they say they take any money of the books, don't believe them, keep in mind that over the next twelve months or so financially Australia is in for some tough times so it might not be the best time to get into business especially if its retail of luxury items.
Sorry to be negative but have a look at the failure rates of business its huge.

[markTHEblake]

Make sure that the accountant you use to check it out is specialised in Due Diligence, and that the purchase contract is subject to a satisfactory due diligence report.

My old man bought 3 businesses, and each time paid circa $5000 each time, and got his money back 2-4 times over by getting the purchase price reduced - because it proved that the net returns were inflated.

[goughy]

My advice would be buy an excisting business as a last option.

setting up a business is harder but if it works then it is more financially benefitial in the long run(less up front costs, smaller loans, and able to sell at a price higher than what it took to set up). On the other hand if it fails then u don't loose as much as most businesses are sold with a goodwill factor included.

Secondly - have an exit strategy. This is a trap we have fallen into. Have a way on how to get out if something goes wrong (illness, poor trade, loose interest in the business etc).

thirdly - Get your accountant and solicitors to go through everything for from the books to the lease etc.

1 adv to buying an existing business is the clientelle base is already there and u can make money from the start (so long as the business u buy is already making money)

Hope this helps


Could have told me this 8 years ago!!!

Sorry, but I hate running a business! I love my work, and not tooting my own horn, but I'm damn good at what I do. But I have no head for running a business. Things over the last few years have explained my struggles.

But now I'm stuck (0 exit strategy). I couldn't sell it, as there is no market for my type of business any more. I'm out 50k if I just shut the doors. And now I'm in a position where I really wouldn't get a job that pays me more than what I'm getting now, so I may as well stick it out. I may feel better once I get the chance to work from home. But I have found it a struggle.

5 years with no holidays. The sickness recently will take me months to catch up. And don't even talk to me about staff!!!!

Wow, now I'm feeling depressed! Where's that block of chocolate??

[goughy]

Sorry, not trying to be too much the pessimist! But how ever hard you think it might be, double it!

[mike]

Thanks.

I've thought for a while of starting up from scratch, but this business just came up for sale. The owner sounds like he's had a gutfull. I'm meeting with them tomorrow.

[Bruce]

Thanks.

I've thought for a while of starting up from scratch, but this business just came up for sale. The owner sounds like he's had a gutfull. I'm meeting with them tomorrow.

Make sure you consider why he has had a gutfull of it and whether it would be something you want to pick up then?

[BrisVegas]

mike, good luck with it.

Goughy, sorry you're in a hole. Hopefully there is something good just around the corner.

[goughy]

It's not really a hole as such. Just 8 year blues I guess. It's kinda at a point that it's too late to do something else, so that's about it.

[mike]

Goughy, never too late mate.

[goughy]

:smt069

[haysey]

If your going to buy into a business make sure it's something your experienced in. It make life so much easier.

Also when it comes to money and how much you need, take your initial figure and double it. Its awfully easy to starve in the first 12 months.

[mike]

If your going to buy into a business make sure it's something your experienced in.

27 years experience.

Goughy what does :smt069mean ?

[goughy]

Don't really know! Seemed like a good smilie at the time :) Like 'the great escape', mcqueen passing time in the cooler!

[PeteyD]

Get Stuffed Goughy!! surely some people need stuffing.

Own business is a sink hole that eats $$. Although it looks like we might be turning a corner now, if I could only quit my day job and spend more time on the business.

[goughy]

I've got plenty of coconut fibre, wadding and foam for stuffing with too!