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Written by Editor
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Monday, 08 August 2005 |
Buying a Business
While many people are excited and thrilled about the idea of running a small business, some find that in dealing with all of the details—business plans, investors, legal issues, etc.—associated with new start-ups, they often lose interest. Therefore, buying an existing business is often an option that has proven simpler and safer alternative.
Advantages
- Drastic reduction in start-up costs of time, money, and energy
- Immediate cash flow because of existing inventory and receivables
- Pre-existing customer goodwill
- Easier financing opportunities
Disadvantages
- Financial costs of acquiring an existing business is usually greater than starting one from scratch
- Hidden problems associated with business and receivables that are valued at time of purchase, but later become non-collectable
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