Business

Benefits of buying an existing food business?

By January 10, 2022 No Comments
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There are pitfalls to watch in buying an existing food business but there are also advantages. Provided you do your homework and check everything out thoroughly with the help of experts, you will reduce the risk of making a bad buy.

RECIPE FOR SUCCESS INGREDIENT CARDS

Ingredient 1: Keep Within the Law

Question:

What are the benefits of buying an existing food business?

Answer:

The benefits of buying an existing business are that you will be able to see what the turnover of the business is from their prepared accounts and whether you think you can improve on that turnover.  You will also have the benefit of an existing customer base that you can build on so that you do not have to start from scratch.

In addition, it may be easier to get finance by producing a business plan, together with the prepared accounts to show the bank what profit the previous owner made and how you intend to improve it.

If you are considering the purchase of an existing business, always have the financial documents thoroughly checked by an accountant who understands the food industry  There is always a danger of the price of a business for sale will be inflated and you will pay too much.  Obtain advice before making the final decision and thoroughly consider all issues.

Try to discover, through inquiry in the area, whether a business is declining and if so, why;  whether new competition has entered or will soon enter the market;  whether a highway is going to be re-routed or some other major local development is planned which could reduce business;  whether the facilities need expensive renovation or upgrading, either to comply with regulations or to operate efficiently;  or whether the outlet’s reputation has declined.  Remember to seek advice from the local council health inspector as to the existence of any outstanding health notices/orders.

On one hand, you are buying an existing concern with an established clientele.  On the other hand, you could be buying someone else’s mistakes and is paying an inflated price for them. 

Want to know more about the benefits of buying an existing food business?

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