If you are looking to grow and develop your business, one of the fastest ways to do so is via the acquisition or purchase of an existing business. It is a process that requires a lot of care and due diligence, but can be a highly rewarding long-term investment. When undergoing rapid expansion, acquiring smaller businesses that offer the same product or service as you can provide you with the added knowledge, manpower and assets to increase your percentage of market share.
Reasons Why You Should Buy a Business
When looking to develop your business, you will be thinking of alternative routes you could take, for example increasing your marketing activities. However doing so carries an element of risk as you could invest a lot of money into a campaign and find that you don’t get a return as a result of poor segmentation, or lack of interest.
Purchasing a business will give you access to an existing customer base. You may currently offer more services or products than the business you are purchasing and you might find scope to upsell more of those to their existing customers.
An existing business can be observed, you can see what works, what doesn’t work and what it could do better. The uncertainty is less than that of starting up a business from scratch.
You will benefit from the existing infrastructure. Existing staff will likely be competent and knowledgeable of the business. This removes some of the guesswork which comes with starting up a new business. The acquisition of ongoing operations and relationships means that the buyer can inherit established banking connections, strategic alliances and ongoing relationships with trade suppliers.
When is the Right Time to Buy a Business?
In many industries, timing is key. Those who purchase a business in the first few months of the New Year are in the best position to be up and running by the summertime. Industries such as retail and leisure experience a significant sales spike in the holiday seasons. Allowing yourself time to establish a customer base before your business’s busy period will reduce the risk of alienating customers.
Of course, as with any business venture — it will carry certain risks. For example, failures to clear up seller’s potential liabilities can you leave you in a spot of bother. It is therefore, vital that you get the right advice. To find out how Aston Shaw can help you create and develop a detailed business plan, contact us today.