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7. Purchasing An Existing Business Or Franchise?
ОглавлениеPurchasing an existing cleaning business or joining a franchised cleaning business are attractive options. However, before you go ahead, make sure that you do all the research and development that you would do if you were about to commence your own business. Do not take the word of a vendor that all is well. Ask to see the books and records for the business but don’t base your decision solely on finances. Make sure that you read and understand any contractual obligations you may have to make. Consult your lawyer and your accountant about all aspects of the business you intend to buy or the franchise in which you are interested.
In the case of a franchise, you are in essence renting the use of the name and systems of an organization. Is the success of the business directly attributed to an individual, or could it survive and continue to grow with you as the new owner/operator? Always ask if there is anything you could do to enhance operations (e.g., Spend more time in the business? Spend more money on marketing?). Ensure that the vendor will cooperate with you in a smooth transition of the business. Make an effort to observe staff in operation.
In the case of an existing business or a franchise, find out if there are any unresolved legal issues. If there are and you don’t find out about them beforehand, you could be adopting a giant legal mess. Keep your inquiries discreet and do nothing imprudent that would upset the business. The sale of a business is highly volatile. Clients who hear that the business is being sold could become upset about security issues and having strangers in their homes. Make sure the owners will cooperate fully and that the business’s goodwill remains intact.
There are advantages in purchasing an existing business or investing in a franchise:
• Goodwill is already established, as is the client and staff base.
• Information about the market potential is readily available.
• Much of the ground breaking has been accomplished.
• Site operation has been previously approved.
The disadvantages are:
• Changes (even for the better) may be difficult to implement.
• There may be problems with clients and staff accepting new management.
• Costs may be incurred in advertising if it is needed to replace lost clients and staff.
Learn everything you can about the business or franchise and get professional advice. Above all, remember to ask these questions:
(a) Why is the business being sold?
(b) What are the physical assets of the business?
(c) What are the sales figures?
(d) What are the costs?
(e) How long has the business been in operation?