Advice needed for buying an existing business

[Ian Thompson]

A business can decline or stagnate for lots of reasons; many reversible. For instance, maybe the present owners have simply refused to change with the times/markets, maybe pricing structures are wrong or cash not being managed very well. All of these might be factors which could lead to a business not producing expected returns but where new enthusiasm and a fresh look at things might make things take off.

[pete_jim]

Before you even start producing business plans doing endless amounts of research and so on - you state that you have no assets or money. If the business you want to purchase has something tangible like a freehold property included with it then you might get away with putting down say 10% of the cost price. If there really aren't any realiseable assets then I think you stand no chance of getting funding. Banks usually want to see every £1 of theirs matched by one of yours.

[steveroberts]

I was wondering if banks would help out someone who has no assets or money to put up front to buy an existing, successful business?

 

There is something called the Small Firms Loan Guarantee Scheme (I know it has had a name change but cannot remember what it is!).

 

It's aimed at individuals who have a sound business opportunity but lack assets as security. Under the scheme the Government will guarantee up to 75% of the loan making it less risky for the banks.

 

Be aware, though, that if you are married, or in a pertnership, then your partners assets will be taken into acount when assessing your eligibility.

 

Speak to your bank manager about it.

[mickeycnova]

Thanks guys, theres some great advice on here. There are a couple of businesses I've looked at, all where either the owners are retiring or moving abroad. The one I originally mentioned has been run by the same people for 25 years & they are now retiring. I know its a big venture & I am young (26) but if nobody would be willing to help people start out in business then there'd be no entrepreneurs & the world would be full of corporate businesses running everything. The business does make a profit every year, enough for the owners to pay their bills & wages etc & to take a nice little amount for themselves. Its something I'm looking at as a first venture to get me started & build the experience for future ventures. I am worried about securing a 100% loan with no money up front though.

Edited February 18, 2010 by mickeycnova
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[Gambler]

Hey Mickey

 

It's great to have your own business, be your own boss etc, but be careful, the last thing you want to do is just buy yourself a mind numbing job under the banner that you run your own show. I did this exact thing myself when I was younger and wasted a great deal of time and energy. Buying any business that relies upon you working lots of hours in a premises with the income solely being generated by customers that may or may not come through the door, can get very very tedious indeed even if the money is good which often in this type of store it isn't.

 

I don't know what type of businesses you are looking at or if you have some kind of passion for a certain lifestyle venture, but seriously consider whether you are actually buying a business, or just a job. If it's just a job, go and get a job, a lot less hassle.

[Jim_Heley]

The best advise I've read here is "wait 6 months and offer half the money" - whatever you do don't over pay for the business.

 

You must also recognise that once you have the business the accounts will be very different to how they are now because you will have to make loan payments every month which may possibly take all your profits. Generally i'd be willing to pay no more than 3 to 5 years profit but businesses are often priced much higher than this especially through agents

Good luck!

[JRH1970]

What sort of business is it?

[Andrew Stern]

If you want to buy existing business first you need to know what place it has in business market. Visit business-asset exchange uk . It helped me a lot once. They have good searching tools and you can analyze what business is most relevant in your area. Good luck!

[steveroberts]

If you want to buy existing business first you need to know what place it has in business market. Visit business-asset exchange uk . It helped me a lot once. They have good searching tools and you can analyze what business is most relevant in your area. Good luck!

 

Andrew, this is a very old post

[*Belle*]

Andrew, this is a very old post

 

Nevertheless, an opportunity for plugging his website