The decision to buy an existing business should be carefully thought out. What are the most important pros and cons that should be weighed?
What will be an ideal response?
Advantages:
1 ) It is often simpler than beginning one from scratch.
2 ) There is a reduction in start-up time and energy if you are purchasing a business that is operational and without serious problems. This means that suppliers, existing staff and management, and equipment and inventory are all in place to help facilitate taking over the business.
3 ) An existing business may have an existing satisfied customer base. If no significant changes are made to drive away current customers, the business can continue to run and provide immediate cash flow.
4 ) If the business has had a positive track record, it might be easier to obtain financing to purchase the existing business.
Disadvantages:
1 ) Because you may need to buy the owner out of the business, the initial purchase price may be high. This can be more than the immediate up-front costs associated with a start-up, but not necessarily any different from a franchise. While you can easily determine the value of the physical business and its assets, it is more difficult to determine the true value of the previous owner's goodwill–the intangible assets represented by the business's name, customer service, employee morale, and other factors–that might be lost with a change in ownership. Often the intangible assets are overvalued, making the business cost more than it is worth.
2 ) With a pre-existing business, you are sometimes stuck with the previous owner's mistakes. This means you might inherit dissatisfied customers, bad debt, and unhappy distributors or purchasing agents. You'll need to work to change the minds of people who have had a bad experience with the previous ownership.
3 ) There is no guarantee that existing employees, management, customers, suppliers, or distributors will continue to work with the business once new ownership takes over. If staff does stay, you might be inheriting unanticipated problems.
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On January 1, the Rodrigues Corporation leased some equipment on a 3-year lease, paying $15,000 at the inception of the lease, and $15,000 per year each December 31. The lease is considered to be an operating lease. Prepare the general journal entry to record the first lease payment on December 31.
What will be an ideal response?
A misconception about marketing is that it is ________.
A. relevant to everyone B. highly public C. highly visible by nature D. all about selling E. no more inherently unethical than other business areas
Reasons for writing long, formal reports include when large numbers of people are affected and when large sums of money are involved
Indicate whether this statement is true or false.
The new terms of a collective-bargaining agreement eliminated the employer's obligation to provide health benefits to retired employees, except for workers who were at least fifty years old. Employees between forty and fifty years of age alleged that the agreement violated the ADEA because it discriminated against them with respect to compensation, terms, conditions, or privileges of employment,
because of their age. a. This is an example of reverse discrimination under the ADEA and is illegal. b. This is an example of disparate impact discrimination under the ADEA and is illegal. c. This is an example of disparate treatment discrimination under the ADEA and is illegal. d. All of the above. e. None of the above. The ADEA does not prohibit discrimination against younger workers within the protected class because the enemy of 40 is 30, not 50.