Question One
Starting a business enterprise from scratch can be challenging for an entrepreneur. There are numerous hindrances such as difficulties in marketing the new business and establishing cash flow. Nonetheless, buying an already established business can bring numerous advantages to the entrepreneur. First of all, it is less risky to buy a business than start from scratch. The already established business already has a financial history and, as a result, the entrepreneur can easily attract shareholders and obtain the required funding. The existing business has established product/service (AKD Consultants, 2013). Thus, the entrepreneur does not struggle to market the service/product since the customers are familiar with it. The entrepreneur who buys a business also benefits from the experiences of the current business leaders and workers. Moreover, the consumer who buys a business is likely to succeed more than the one who starts from scratch.
Question Two
Evaluating the assets of a certain business helps one know its worth. However, the process of evaluating the assets of a business is complex (AKD Consultants, 2013). An individual should, thus, seek the services of different business experts such as managers, financial advisors, and accountants, among others if he/she is unfamiliar with how to determine the value of the assets of a business that is already in existence. These experts help the unfamiliar individual know how much it will cost to purchase an existing business or start a new business similar to the one whose assets are valued.
Question Three
Numerous entrepreneurs encounter problems when they purchase a business already in existence because they do not follow the necessary steps. The first step involved in the correct way to purchase a business is the examination of the entrepreneur’s interests and capabilities. Ideally, this helps the entrepreneur choose the business that he/she will enjoy operating and be able to make it successful. The right business for the consumer is the one, which fits his/her financial and personal goals (AKD Consultants, 2013). The second step involves listing the prospective businesses. The subsequent step involves analyzing the listed businesses to determine the most promising one. During this stage, the entrepreneur is required to conduct both internal and external analysis of the listed businesses to help choose the business that has the highest probability of succeeding. The next step involves exploring the options for funding. After this, the entrepreneur is required to negotiate with the business owner and eventually make sure that there is a smooth transition after striking the deal to acquire the business.
References
AKD Consultants. (2013). Buying an Existing Business. Broadridge Investor Communication Solutions, Inc.
