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Why Buy a Business?

In a nutshell, your chances of success are far greater than if you start from scratch.

There is no shortage of bad news when it comes to the number of new businesses and start-ups that go bust within the first few years of operation.

According to Barclays, 25% of all new businesses fail within their first year.

The good news is that some of these often-quoted statistics - like the one that says 90% of all restaurants fail in their first 12 months - are simply not true.

However, the real test for a new business is whether it's still trading after five years. It is generally accepted that only 20% of start-ups make it to their sixth birthday.

That is why looking at small businesses for sale, as opposed to starting one, is a great way of improving your chances of success.

Buying a business is neither complicated nor rare. The internet has made the market for small and medium sized enterprises for sale more accessible. Rather than trawl your local newspaper or a trade magazine, you can now use the web to browse thousands of exciting new business opportunities to begin your career as an entrepreneur.

At any one time, features over 58,000 businesses for sale. Ranging from cutting-edge internet companies to fish and chip shops, a business is sold every three hours. 

Some of the biggest names in business have bought their way to success allows you to buy an existing business as a way of getting to that sixth birthday without having to go through all the pain of teething, learning to walk, bumping your head and trapping your fingers in doors.

Not many budding entrepreneurs would necessarily be acquainted with a business broker or transfer agent (they are the estate agents of the business buying world) and how to go about finding one. Our Services Directory allows you to browse business transfer agents, along with accountants, lawyers, finance service providers and surveyors.

Buying a business is not a new idea. Some of the biggest names in business have bought their way to success. The financial press is littered with businesses-for-sale stories - attempts by Philip Green to buy Marks and Spencer made the front pages, for example.


It does not matter whether you are buying Marks and Spencer for billions or that gem of a corner shop at the end of the road (with accommodation) for the price of a three-bed semi. The principles of buying a business are the same.

The best entrepreneurs will say that you should buy a good business, at the right price, and then make it great - whether it is a pub or a public limited company.

Sometimes, these businesses are not cheap - especially the good ones. However, ask yourself, how much it will cost you to be one of the 80% of entrepreneurs who fail to make it past year five? How long will it take before you recoup your start-up costs?

The first few years of a start-up are notoriously difficult because even with all the best planning in the world, (many new businesses fail in their first and second years because of no planning at all) a great deal of your time will be spent trying to understand the business you have just set-up.

You have an idea of what your business is - the product or service being offered, customers, costs involved, employees, sales and marketing functions, accounting and administration activities. You have done the planning and research and have forecasts and projections in place.

Yet, like war itself, planning alone will not bring victory. You need to be adaptable - be able to make changes to your business model as you exploit emerging opportunities and shut down those things that are not working.

It will require you to put your dream to one side and become a ruthless operator as you aim to survive by pursuing the most amount of revenue in the shortest timeframe, prioritising accordingly.

Alternatively, when you buy an existing business, you should be buying something that has already been through this process. This means that the tremendous energy that would have been spent on starting up a new venture can instead be used on improving an existing opportunity.

For people who have never bought a business before and are completely new to the idea of buying a business, it is advisable to do your homework. Research the whole process thoroughly - especially when it comes to valuing a business and making sure you are buying the business you think you are buying.

Many business buyers who visit have no idea which sector or industry they want to buy into and it is not uncommon for buyers to change their mind half way through the process.

Investigating three or four industries before even starting a search for a suitable opportunity is a good start. It is during this process that you may come across an industry you never imagined yourself in before. There are many stories of people who started out looking for a restaurant but ended up buying a health club.

You will also need to appraise your experience and skills in order to determine whether a specific industry will suit you, i.e, if you are thinking of buying a pub it might be an idea to work within the sector first. Drinking in pubs is simply not enough! You need to get on the other side of the bar and get some real experience under your belt.

Consider buying a leasehold opportunity, at least for a few years, before you dip into your life savings to pay for that £500k freehold. A leasehold is the equivalent of renting the business (which means you get to keep the profits) whereas buying the freehold means you purchase the property outright.

Once you have decided on the industry you can then start searching for that perfect opportunity. Be prepared to move - it is not uncommon for people to move to different parts of the country or even the world when the right business comes along.

Remember, this will be one of the biggest purchases you will ever make. It is not a decision that should be rushed.

Assessing the value of the business you are interested in buying is something you must take very seriously. You must leave no stone unturned in determining the real value of the venture you are about to purchase.

Always seek professional advice from accountants, lawyers and business brokers at the appropriate time.

Also bear in mind that the business is only worth what you are willing to pay for it. Make sure you know your limits and then stick to them.

Buying a business is a technical process but there are common sense rules you should apply in order to maximise your chances of acquiring the right one for you.

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