Top 6 Reasons to Buy a New Business Vs Starting a Business

There are several reasons to buy a business versus starting a business. Here are a few:

1. An existing business can be financially predictable- A business that has been around for at least 2 years has a track record. The future expenses, cost of goods sold, employment expenses should have some correlation to the past years.

2. Financing is more readily available- Banks are strategic betters. They like to “bet” on ventures that are proven instead of new concepts. Statistically businesses that have been profitable for more than two years are going to continue to be profitable – or at least have income.

3. You can replace your income- When you buy a business you can potentially predict replacing your current income. Most business buyers are what I like to call “job buyers.” These are people who are looking to replace their current job with a new income and a new position.

4. An existing business should have sustainability-The businesses should already have existing policies, procedures, and employees. All of these elements will help you to sustain the business without the massive effort of starting a new business.

5. Starting a business takes a lot of energy to start- Starting a business is difficult and people frequently fail due to undercapitalization, poor planning, or misconceptions about owning a business. However, undercapitalization, poor planning and unprepared entrepreneurs are major reason on why business acquisitions fail. The big difference is that for the first year of starting a business you are just starting a business. You have so many things to worry about that you aren’t able to focus on making money. When you buy a business you can use your time effectively.

6. Current economic conditions favor business acquisitions right now but deter business startups- While I write this article we are having major financial issues as a country. Starting a new business today is like starting a new business in the great depression. Buying a business is an excellent time because businesses are selling for the lowest prices they’ve seen in over two decades! That means there is great opportunity for people who are prepared.

Before Applying For a Bank Business Loan, Make a Good Business Plan

If you could be interested in starting a small business, then unless you can lay your hands on a copious source of prime hard cash, then you may possibly be thinking about looking into getting a bank business loan. There are many lenders that may be able to aid you obtain the vital business loan; these lenders have specialist start up business loans and are keen to start up new companies and have rates of interest that are designed for these sorts of start up business loans.

The specialist companies offering bank business loans will generally create a loan for the complete venture start up to encompass buying of land, bricks and mortar, stock and a stock register, equipment from the previous business owner, indispensable new hardware, and an adequate amount of working funds to last longer than short-term restrictions of workforce wages, repairs to hardware, company business cards, and some kind of company promotion proposal which may encompass a website making and promotion, etc.

Bank business loans may be helpful for starting up franchises ranging from two hundred and fifty thousand to a couple of million dollars, or existing corporations; the new business purchaser will require a credit worthiness rating of well over 600, a minimum deposit of one sixth of the total loan, and if possible some high-quality comprehension and former applicable experience with that kind of company.

Small business finance – Secured bank business loans Vs Unsecured bank business loans

If the above restrictions are met and the hopeful new company title-holder is keen to put up with a secured commercial mortgage, which as a rule means possibly releasing their personal residence as guarantee which the lending company can receive if the applicant fails to maintain their monthly commitment of the finance, then the desired small business finance should be reasonably easily obtainable; a satisfactorily planned commercial proposal, showing probable future sales (with some basis of market study to justify it) and a detailed predicted proposal of all credit and expenses for the next two or three years, would normally be a sufficient amount to get the requested business loan, if the concern is feasible.

Unsecured bank business loans for small business finance are a great deal more hard to obtain and may as you might expect be charged at a more obnoxious rate. Additionally the corporate proposal ought to be more detailed than intended for a secured commercial finance. A high-quality commercial proposal takes a good deal of work to develop, or else a wedge of cash if you manage to hire a business plan consultant to create it for you; it is extremely easy to become frustrated at this time of working to get the concern up and making money, as you possibly just would like to work the venture and start beginning to return the cash that you’ve fed into it; try not to be dejected and just attend to doing each thing that is vital to make a first-rate commercial design.

Beware using family members!

One of the most basic fundamentals for a flourishing business is the loyalty and know-how of the workers; lazy workers who are solely interested in justifying their personal requirements can rapidly develop into a lead weight to a company, particularly whilst starting a small business. Using relatives can pan out well if they are close members of the family and as fully motivated and loyal to the partnership as you. But do not trust kinsfolk outside of the close family circle  – uncles, nephews, cousins, nieces and aunties, etc; they may hope that they can demand extra things with you because you are a relative, and determine to steal from your pleasant nature; starting a small business might rapidly lead to beginning a big nightmare.

If you are living in the United States of America, whatever the kind of requested mortgage, take care that any regulations insisted on by the SBA (Small Business Administration), are respected and followed before asking for an SBA commercial finance. The SBA will come up with useful business loan tips and will be working together with the lending company; no final deal can happen without the sanction of the SBA.

In the United Kingdom, the British Chamber of Commerce produce a very nifty commercial start up pack which incorporates useful advice on business loan tips, corporate insurance, new expertise and telecommunications factors and most UK banks will commonly have a business specialist’s advice on the establishment and control of the concern. Several of the British banks have a good advice service on personnel factors – this can be slightly dear when just starting a small business, but very useful.

Find Out About Writing a Business Plan

If you have entered a new era in your life of no longer wanting to be working long hours to satisfy your boss, then perhaps you have mooted the idea of starting a new business but are rather overwhelmed with the idea. With the seed of a concept of a possible business, you will next need to know the essentials of writing a business plan or the fundamentals of writing a business plan done for you using the skills of a business plan consultant.

A good business plan is critical before looking for a small business loan from any bank that deals with small businesses, Government sponsorship, or lending service. Understanding the rudimentary principles of accountancy is essential in your business plan; it is very essential to record all business transactions logically, usually sorted by date.

A business management consultant usually uses a spreadsheet, and Microsoft Excel is probably the most likely, to represent all the transactions of the business, the data being displayed on usually more than one page of the spreadsheet; oftentimes a summary page gives a list of all outgoing and incoming transactions recorded daily, and then other pages will give more details about certain titles of expenditure – for instance, a country house hotel business would itemize alcohol purchases, bread, milk, food, frozen items, curtains, equipment needed for repairs, hiring of cigarette machine, etc for each day on the main summary page, but there would be a detailed page for each of these topics which would list all entries for alcohol, for example, for the current month.

When you have to learn about writing a business plan for starting a new business and seeking to get a small business loan, you will need to write the plan by displaying in a predictive manner what represents future earnings instead of recording actual figures on a daily basis as they occur.

So being involved in writing a business plan includes not just income and expenditure forecasting for each month for the next 24 months but also showing evidence proving that your data can be backed up with solid facts.

A business management consultant will invariably stipulate that some form of market research is done for the business plan structure; this may be possible by simply talking to prospective customers, if you are wanting to start the business in a town, and making a document that shows the questions and answers; note that carefully planning the questions can alter the response that people give.

As an extra to an excellent business plan, a small business financing company will require a report of your credit worthiness and any bad credit history, personal resume, the purpose of the loan and what you intend to spend the money on, a balance sheet predicting the profit / loss of the business from day 1, details of all income and expenses that are predicted from day 1, e.g. mortgage payable on business property, rental of equipment, stationary supplies, staff wages, marketing / promotion costs. If the business is already established, you’ll also require details of past finances for the last 3 years and details of unpaid debts at the start of the business and your intentions showing how you will repay these in addition to the payments required for the business loan.

Some amount of knowledge of writing a business plan makes a vast difference for starting a new business but after that it is down to a lot of hard work and perseverance; a small business financing company will be very hostile towards someone who shows them a crappy business plan, or if they don’t come across as being confident because of insufficient knowledge about how to run the business or how to treat its customers.