Buying a business that is already trading can offer a buyer the following benefits:
- The business is already up and running in a given market/ sector.
- The business has already established to some degree branding, a customer base and a reputation.
- The business will have a trading history with a known level of income and expenditure.
- There will be employees who already know how to run the business, albeit under your guidance/control.
- A prospective purchaser will always have room to improve the business.
There are also some disadvantages of buying a business that is already up and running:
- The fact that the business is for sale, could suggest there is something fundamentally wrong with some aspect of the business. This is worth investigating from the outset.
- There may be additional costs of furniture, equipment or stock that will need to be added to the sale price upon completion.
- There will be legal costs in addition to the purchase price you will pay for the business itself.
- Any costs for improving the business will be in addition to the purchase price.
- You will be taking on the business and all that comes with it – i.e. any creditors!
- You may need the continued involvement of the seller after completion to help make the handover process go smoothly.
If you are considering buying or selling a business and would like further information or assistance with the process then you can get in touch with one of our expert Solicitors in theCommercial department who will be happy to help.