Buying a Business: Frequently Asked Questions
Why should I not find and buy a business on my own?
A business broker can help you to determine what business best fits your preferences and goals. These professionals can expose you to many types of businesses that fit your criteria. Since this is our business, we are exposed to a large amount of new opportunities daily; some of those opportunities may be just what you are looking to find.
Why not just start my own business?
Statistics show that over 60% of new businesses fail in the first 3 years, for reasons such as poor location, low product quality, under capitalization, and lack of management skills. Additionally, the effort (“sweat equity”) required to start a business is significantly greater during the first 3 to 5 years. This effort and risk can be eliminated by purchasing a quality business with a proven track record and cash flow.
Are Franchises the better way to go?
For some business owners, franchising is the way to go. Generally, franchises require less effort to run; systems have been created to ensure success and branding has been accomplished to bring in customers. However, franchises cost more money to acquire, and royalties are paid on revenues. Furthermore, the rules and regulations of the franchise must be followed. Owners who want a lower investment and more management latitude will frequently choose an independent business.
How much should I offer for a business?
A business is worth whatever a willing buyer will pay a willing seller. However, the value of most businesses is determined by what someone can afford to pay for it. If a business can earn the income you want and make the debt payments, then it is worth the price. Your Empire Business Broker will help you determine what you need to make and structure offers around your requirements.