What is a common drawback of buying an existing business quizlet?

its location may have become unsuitable; equipment and facilities may be obsolete; change and innovation are hard to implement; inventory may be outdated; accounts receivable may be worth less than face value; and the business may be overpriced. You just studied 58 terms!

What is a possible drawback to buying an existing business quizlet?

A possible drawback when buying an existing business is that: uncertainty; they view business uncertainty as something they can turn to their advantage.

Which of the following are reasons for buying an existing business?

Six Reasons to Buy an Existing Business

  • Mentorship. The existing owner is often willing to stay on for a period of time to mentor the incoming owner. …
  • Cash flow. An existing business already has customers and continued cash flow. …
  • Financing. …
  • Established Name and Reputation. …
  • Current Staff. …
  • Market Position.

Under Which type of agreement does a business seller agree not to open a competing business within a specified time period and geographic area of the existing one?

#4 Restrictive covenants

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The sale and purchase agreement will, therefore, contain restrictive covenants that prevent the seller (for a specified time period and within specified geographic regions) from soliciting existing customers, suppliers or employees, and from competing generally with the company being sold.

Which is better starting a new business or buying an existing one?

When you buy a business, you take over an operation that’s already generating cash flow and profits. … However, it’s often easier to get financing to buy an existing business than to start a new one. Bankers and investors generally feel more comfortable dealing with a business that already has a proven track record.

What is a common drawback of buying an existing business?

its location may have become unsuitable; equipment and facilities may be obsolete; change and innovation are hard to implement; inventory may be outdated; accounts receivable may be worth less than face value; and the business may be overpriced. You just studied 58 terms!

Which of the following is a drawback of buying an established business?

Which of the following is a drawback of buying an established business? It has less opportunity for creativity.

What are the disadvantages of outsourcing?

Disadvantages of outsourcing

  • service delivery – which may fall behind time or below expectation.
  • confidentiality and security – which may be at risk.
  • lack of flexibility – contract could prove too rigid to accommodate change.
  • management difficulties – changes at the outsourcing company could lead to friction.

What are the advantages and disadvantages of purchasing a franchise?

Advantages and disadvantages of buying a franchise

  • Franchises offer the independence of small business ownership supported by the benefits of a big business network.
  • You don’t necessarily need business experience to run a franchise. …
  • Franchises have a higher rate of success than start-up businesses.
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