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When making the decision to start or buy a business, there are many different things to consider. Part of the decision-making process should include a good look at what businesses are listed for sale through commercial real estate brokers in Minneapolis. Once you’ve decided which direction you want to go, you’ll already have a good idea of your next steps if you did your research carefully. There are many challenges to starting your own business that purchasing an existing business can help you avoid. While you do have to deal with financing, often the benefits of purchasing can out weight the negatives. Business Details Start by looking at the business itself. New businesses have an 80% failure rate in the first 18 months. This is a huge risk that goes away when you purchase an already established business. Whether the business model requires a strong client base or acceptance of a particular product, the work has already been completed for an established business. When starting your own, you will need to do legwork to gain those first loyal clients and market carefully to gain acceptance of your new product. That said, even an established business will need a successful marketing campaign to continue positive growth. Employees Next, look at the employees of the business. Starting your own business allows you the chance to hire and train individuals the way you want to, and to pay them whatever starting salary you wish. You can also make decisions regarding how many employees you need or want without impacting already existing jobs. The downside would be the time and effort you put into the hiring and training process that you could have otherwise spent on furthering the business. Buying an existing business provides you with a set of already trained employees. This can be a benefit as you will spend less time training employees and more time working the business end of the company. The downside to buying a business is that the employees may be more loyal to the previous owner than to the company itself, and you may deal with some unexpected turnover as you take over the business. Finances When comparing options, you’ll also need to take a careful look at the finances involved. With a start-up business, you will have to start from scratch. This means you need to have the available cash for all necessary equipment, supplies, and assets. Likewise, you will need the ability to live without a salary while you wait for the business to get up off the ground and making income. Purchasing an established business often means receiving all assets, both physical and intangible. Physical assets may include the equipment, technology, and inventory required to run the business. Intangible assets may include public acceptance and customer loyalty. You will also be stepping into the position of managing a company that is already making money. This means you will likely make a salary from day one. Purchasing a business may be a more financially lucrative choice if you can find a bargain. Often business owners will sell out of necessity if they have fallen ill or are otherwise unable to manage the company affairs. Strong negotiations can often result in receiving quite a good deal. In the end, there are positives and negatives to both starting your own business and purchasing an existing business. Only through careful examination of all sides can help you decide which option is best for you. If you decide to purchase a business, you should interview several commercial real estate brokers in Minneapolis and find the one that you feel the most comfortable with.
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