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Starting
up a Business |
Five methods in going
into business
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1. Starting up a business
2. Buying an existing business
3. Inheriting a business
4. Franchising
5. Management Buy Out
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Starting Up A Business
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Starting up your own
business from scratch requires attention
to the following:
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Identifying a target
market and its basic needs
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Assessing size of
target market and its ability to
sustain a profitable business.
Determining amount / availability of
start up capital.
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Devising a product
strategy the matches the target
market.
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Devising a
competitive strategy.
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Find suitable
location.
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Selecting / training
staff.
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Obtaining / meeting
legal obligations.
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Developing a
carefully considered business plan.
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Buying an existing
Business
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When you buy an existing
business, the price that you pay should
be assessed on its potential to earn
profit.
Two methods that can be used to
determine reasonable value:
1. Capitalized Value
2. Appraised Value
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Inheriting a Business
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Inheriting an ongoing
business through the death of a relative
or friend is another method of getting
into business.
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Franchising
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Buying a business, this
includes involvement and support of a
large organisation (Franchisor).
There are a number of advantages and
disadvantages in Buying and Existing
Business.
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Buying an existing
Business
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Advantages
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Receive immediate
income from sales to existing
customers
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Save time & effort to
equip and stock the business
yourself
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Proven location
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Established
relationship with suppliers &
creditors and existing employees
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May be cheaper than
trying to assemble bits and pieces
yourself
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Proven track records
makes an existing business easier to
finance
-
Risk of failure is
significantly less than if you tried
to
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Disadvantages
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You are stuck with
the previous owners bad decisions
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You could pay to much
for assets
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You may inherit ill
will felt by some customers
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Poor morale amongst
the staff
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If you are looking a
getting into business or are already in
business, Tony Taktak & Associates
can show how to build wealth, through long -
term investments.
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