The Top Four Disadvantages of Buying an Existing Business
Finding a good location for your business may be difficult
if you have limited funds. An ideal space should have plenty of room for
offices, meeting rooms, a break room, restrooms and any other spaces that
you'll need. It should also have plenty of parking spaces and offer easy access
to major roads or highways to give your employees more time in the office.
Finally, the location should be a short distance from commercial businesses so
you can sell them products.
In cities like Philadelphia and Baltimore, prime locations
can come with hefty price tags so many buyers will look in suburban areas where
land is cheaper. But these areas are often less accessible to commuters than
downtowns or urban communities.
Existing employees will make up a large part of your
company's culture. The way they behave, interact with one another, and
represent your company on the outside reflects back on you and can influence
the perception other potential candidates may have. So how do you work with
these people? Ask questions! Find out what their roles are, how long they've
been there, who their mentors were when they started, what challenges have come
up for them in their position... And so on. These questions will allow you to learn
from those who know the best about what it takes to thrive in the environment
at hand.
One disadvantage that you will want to take into
consideration is a new tax bill that has just been passed. It creates a big
shift in the way businesses are taxed, putting a greater emphasis on immediate
cash flow. The bill also changes tax rates and expense deductions for companies
organized as partnerships, including LLCs and LLPs. These changes make buying
an existing business less appealing because there are now more risks than
benefits when it comes to running the company on your own.
This might not be much of a problem if you're looking to buy
small niche businesses or those that already bring in a good amount of money,
but would be something to think about before diving headfirst into purchasing a
company with too many needs without being able to financially handle them.
-Licenses and permits are a must if you want to legally open
up shop. Licenses will cost you anywhere from $500 to $10,000 and are generally
dealt with in the following ways:
1) You decide what licenses or permits you will need.
2) You can hire a consultant who specializes in this area
and they will figure out which licenses and permits you will need.
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