Contents

• Executive summary
• Introduction
• Why purchase an existing Business?
• Search process
• Conclusion
• References

Description

Buying an existing business offers many advantages over starting a new business. The person or the company that purchases an existing business would need to think of just creation of value addition to the existing product or service and is absolved of the processes of starting a new business. Purchasing a new business has its own advantages as well as disadvantages. Advantages are that the company would already have a product or service established in the market, might already have consumer base and the company would have already built a brand value over the years. Disadvantages are that the buyer might have to own an organization built by someone with organizational culture and ways of functioning that may not necessarily conform to that of the buyer, or the company might have accumulated huge debts, which the new buyer has to repay. However, the advantages outweigh disadvantages to a great extent if the buyer is careful in evaluating the deal and in negotiating the right terms for the deal. The search process of buyout starts with the buyer assessing his or her resources such as finances, education, skills and experience. The next step would be to have an idea of what the buyer would want to own in terms of business area, business volume, geographical area etc. Once the firm for purchase is identified a careful evaluation of the assets of the organization, business volume, business potential for future etc. are carried out. The buyer at this juncture needs to assess the advantages and disadvantages of the deal before taking concrete steps in acquiring the firm. The search process of an acquisition starts with the buyer having the desire and sometimes need to own a business and the search process ends in short listing the company on sale for further negotiations.