Home – New Forums Starting your journey Do I buy an established business or Start up a new one??

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  • #989001
    mummyof5
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    Hi everyone,

    Well I’ve been looking at having my own business for a while now and the time has come I’m ready for the plunge. :) The only thing is I’m not sure whether to buy an existing business or start up fresh. There’s an online business that I’ve made enquires too and it sounds pretty good, but I want to make changes. I don’t like the business name so I would be looking at getting that changed as well as the website setup. I do know there’s a lot involved with changing a business name and I’m prepared to go through all of that process.
    However would it be better to start a fresh business from scratch? My only concern with starting up from scratch is getting contacts from wholesalers for products.
    Is it really hard to get the first contacts? I’m worried if I start from scratch that no wholesaler will do business with me as it’s a new business. This is the reason I’m thinking that buying an established business would override this problem as they already have the contacts in place which I then can expand from there.

    My plan is to leave the business online to begin with and then expand to a retail store.

    I look forward to some feedback as I need some clarity as to which avenue is the best approach.
    Thank you

    Naomi

    #1169999
    Anonymous
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    Hi Naomi,

    Thanks for joining the forum today :)

    It sounds like exciting times for you, and I hope some of the community here can offer input on your questions.

    To help us give you the best advice we can, it would be great if you could please update this thread (and your other one) with some background info on the type of industry you’re talking about.

    All the best,
    Jayne

    #1170000
    Tony Manto
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    Hi Naomi, I think it is much easier to buy an existing business that start a new one, but I would not change the name of an online business. On line business is very tricky. The existing customer already know and look for that name, so by changing it you will destroy the business. Its ok to change the layout of the web site, but that too can destroy what is working.

    My advice is to make small changes, add new products and as you evolve. You have to remember that is not what you like but what the customer likes that’s important!!!

    #1170001
    MissSassy
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    Hi Naomi and welcome

    WOW mother of 5 are you sure you have the time ;) well they say if you want something done give it to a busy woman.

    Anyway – Tony has given you good suggestions answering your open query. I would suggest that you speak to a business adviser / mentor or at least someone who has been in business successfully for themselves to get some ideas about what you are looking at.
    Changing the name of an online business would be a disaster as chances are the domain is the same name – that would be like starting again with Google.

    Don’t forget to look at why they are selling and if you can do more to improve their offering – not so easy to answer over a forum.

    You have a lot to think about – do your due diligence and you will be able to make a wise choice.

    #1170002
    mummyof5
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    Thanks everyone for your feedback :)

    The industry I’m wanting to get into is a maternity boutique that includes natural products mainly made in Australia as well as incorporating some baby products.

    I really want to use the name I’ve designed as its unique as well as the logo. So basically that means I would have to start from scratch. Is it hard to start up fresh with making contacts?

    #1170003
    bb1
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    Hi naomi,

    I wont say you should buy established or start a fresh. What I will say is that there are pro’s and con’s for either, and if you are keen enough you can make a new business just as succesful as an established one.

    My first question about buying an established business is not what all the consultants will ask, which would be what is the Goodwill in the business, but rather what is the Badwill. No one talks about this and it doesnt appear in any of the documentation you will be given, or when discussing it with the vendors.

    They will show you the figures on turn over, sales, profit, etc, etc. But they wont discuss how many customers they have lost, upset or turned away.

    Also remember if people have already looked at their website and decided they are not for them, no matter where they rank in google, those same potential clients will bypass your website, without even realising that it has changed ownership. Yes been number one on google is great, but its useless if the potential client has already looked, and for a multitude of reason said “no way known will I buy from them”.

    Buying an existimg business brings with it all the baggage of the existing owners.

    Starting your own busines brings a lot more startup work and effort, no income for weeks , months or years. But is it as bad as it sounds.

    I guess I came from the perspective of been told I should buy existing or a franchise, and decided to start my own, and within 6 months had a up and running business and turning clients away. so it can be done.

    Think long and hard about the best option.

    enough from me

    #1170004
    MissSassy
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    mummyof5, post: 197157 wrote:
    Thanks everyone for your feedback :)
    Is it hard to start up fresh with making contacts?

    Every supplier is different – start doing some research and speak to some suppliers that you are interested in. Remember that you don’t need to have 1000’s of different products, select a few staple items well priced and popular to get started.

    #1170005
    bb1
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    We recently went looking for wholesalers for Giftware (yes I know I’m into gardening), we talked our way into the yearly wholesale trade show, and most were willing to deal with us as long as we had an ABN, and were willing to spend the minimum purchae (varied $250 to 1K), so see if there are trade shows for what you are after.

    #1170006
    Peter Watson
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    This is a very good question and one that a lot of entrepreneurs ask all of the time.

    It really depends on the industry, location, price, etc, etc. I wrote a blog on this below:

    Minimize the Risk & Buy an Existing Business

    Hope it helps.

    #1170007
    mummyof5
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    Well I’ve decided to start my own business from scratch after much thought.:) I just feel very passionate about my ideas and concepts for the business and want to be able to put them into process. If I had an established business even though the foundations are there, I would lose my own concepts. I contacted a web designer today again after much research and found one I’m really happy with. I just don’t know whether to contact the wholesalers before or after I design my webpage. I noticed that some of them request the website to the business. Is it a big factor if you don’t have one as of yet?

    Thanks

    #1170008
    Webslice
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    mummyof5, post: 197216 wrote:
    I just don’t know whether to contact the wholesalers before or after I design my webpage.

    Why not register your domain, setup email, put a really basic website up e.g use a http://www.weebly.com design then start contacting the wholesalers while your working with your web developer.

    That way you can start the discussion with your wholesalers and if they ask if you have a website you can say yes, but a new one is on the way etc.

    That’d be my advice.

    #1170009
    mummyof5
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    Webslice – that sounds like such great advice thanks for that. Would it matter though if no products are on there?

    #1170010
    Webslice
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    mummyof5, post: 197226 wrote:
    Webslice – that sounds like such great advice thanks for that. Would it matter though if no products are on there?

    I don’t think so.

    Just have a site that has a few pages and maybe list some information about the products you will stock etc so they know your serious.

    If anything this will also help you get into search engines when you launch the real thing. Don’t forget all the google stuff you need to do like Google plus, Google places, Google analytics, Twitter, and Facebook etc

    #1170011
    Natalie Khoo
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    Hi there Naomi. Congratulations on deciding to start your own business. I
    think you have made the right decision. If you are passionate about what
    you do, with a can-do attitude and willingness to reach out (proven by your
    activity here on FS), you will find your feet – regardless whether you
    start supplier relationships from scratch or not.

    Regarding getting started, other contributors here are right in saying you
    need to get your domain name registered immediately, and then look at
    setting up business email addresses and a simple website. Your site can be
    as simple as a one-page design that has some clear content about what you
    plan to do. That means you’ll need to enlist a designer/developer to do
    this for you to match your branding for consistency (you said you had a
    logo already).

    While you’re getting set up, there’s no harm in setting up a Facebook page
    which might also share some ideas and images of what you plan to sell and
    get some conversations going about what mothers-to-be want in the market.
    That way, you will have garnered a small community by the time your website
    goes live.

    My only warning is to ensure that you invest a decent amount of time/money
    into the content and ‘user experience’ of your online store (i.e. how it
    works). There’s nothing more frustrating than a shopping cart that doesn’t
    work, or the inability to find products you’re looking for. A good
    developer should be able to help you with this.

    Best of luck with it! Natalie

    #1170012
    The Hobbit
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    I don’t believe you will have any problems getting wholesalers to deal with you as a new business.
    As other people have said you need to weigh-up the pros and cons. Starting from scratch may take time but often ends up costing a lot less the the purchase price of an existing business. An accountant maybe able to assist you do the comparison.

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