Question

3. Make a list of the advantages and the disadvantages of buying an existing business

Answer 1

Advantages and Disadvantages of buying an existing business are as follows:

Advantages:

1. Business setup - The business has already be setup so no need to make more investments.

2. Finance - It is easier to get funds from market for the existing business due to it's Goodwill that company earns.

3. Goodwill - In existing business the customers is already there and this is very required base for growing the business to the heights.

4. Market place - Existing business has already earned it's maket place for their products.

Disadvantages

1. Finance - For the Cash flow the large amount of funds may be needed by the existing business and to pay the salaries to the employees and the solicitors.

2. Contacts/Agreements - Those contracts the business undertaken previously need to be partially changed or removed.

3. Investment - If business starts falling then more investments is required to make the profits for coming future.

4. Employees - The employees morale could be down if existing business is running bad and not getting profits form it's operations.

5. External factors - The Growth in the future may be affected by the increased competition.