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If you need a house, you have two opportunities. Firstly, you can buy a land parcel for building. You can get a permission, engage an architect and civil engineers, purchase materials and worry because of the result. Then you can move into the new house in 6-12 months, if everything is all right. Secondly, you can buy an existing house. The same situation is actual for businesses, but every coin has two sides.
Advantages of purchasing an existing business:
Success story. The existing business has its own story, that helps to value it objectively. Such a business has already confirmed its vitality.
Rooms and equipment. In general we are talking about the whole property, which is necessary for the function of the enterprise.
Co-workers. Working enterprise has always a skilled staff.
Vendors (suppliers) and channels of sales.
Position on the market. The existing firm has already certain position on the market, so it is possible to forespeak business-development, swings of demand and competition development.
Disadvantages of purchasing an existing business:
The equipment can be outworn and the technologies – unmodern.
The lease can expire soon without an opportunity to elongate it.
After the replacement of the leader personnel co-workers can retire.
Often the buyer is forced to look for new vendors and clients, because the previous have co-operated with the owner of a business as relatives.
You can find out unpaid taxes, penalties etc.