063 Antony Whitaker
Today I'm going to talk about a question I am often asked, should you buy an existing business or build a business from the beginning? There is no one size fits all answer, so let's talk about the pros and cons of both options.
I have done both. There are good and bad with both options, and they vary dramatically depending on the business you are buying and the situation you are in as a potential buyer.
Some red flags to look for are: most businesses are built around the person who owns it; when they leave, the business's value often leaves with them. The second challenge is that you need to be cautious about what the person selling the business will do. Probably the most important challenges are you are inheriting the culture of that business, and the existing team might not be willing to make the changes you want to make. When ownership changes, it's an unsettling time for both the staff and the clients, and you might end up with no staff or clients.
Now let's look at the advantages of buying an existing business. If you buy an existing business, that means it's already functioning with staff, clients, and relationships with vendors. You also start with the staff, clients, and an immediate cash flow, which is a huge advantage over building a new business. It also comes with structure and systems in place and has already established itself in the community.
Is it a get rich quick scheme? Should you do it? There is no cut and dry answer to that, it's up to you, but buyer beware, as the saying goes. We cover many points in this podcast that show you some things you need to be aware of if it's something you are thinking of doing.
In This Episode:
[00:33] Welcome to the show!
[02:01] Be careful about the type of salon you are buying; the value might leave with the owner.
[03:22] You need to be cautious about what the person selling it is going to do.
[04:58] When you buy an existing business, you are inheriting the culture of that business.
[06:27] With the business comes the people, the existing team might not be willing to make the changes you want to make.
[09:09] If you allow the owner to stay on, be careful that they aren't working behind your back.
[11:14] You might end up paying too much for an existing business.
[14:15] Don't forget to think about the fixtures, furniture, and inventory's worth.
[16:46] Find out the real reason they are selling.
[19:04] Antony discusses the advantages of buying an existing business.
[20:40] An existing will have systems and structures already in place.
[22:31] The risk element is less.
[23:39] Antony shares some questions that you need to ask yourself.
[26:11] Have you got what it takes to run a business?
[29:14] Another thing to think about is whether all the money has to be paid upfront?
[31:07] Do you already have another salon? Where will you work?
[33:47] Are you a leader because it's a people business that you are buying?
[35:51] Antony says it can be hard work, and there is a risk element involved.
[37:31] Thank you for listening!
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