Advantages and Disadvantages There are several advantages and disadvantages of purchasing a business (1).
Some of the benefits of purchasing a business include:
1. There is only a single transaction involved to acquire the business rather than multiple filings with the city, state, and federal governments.
2. An existing customer base and market share.
3. One competitor is automatically eliminated.
Some of the possible downsides of purchasing a business include:
1. The company may be a collection of problems rather than an opportunity.
2. Transition from one owner to another is highly stressful on the employees, the vast majority of whom are resistant to change.
3. Employees may leave as a result of the change to new ownership.
4. A purchase is predicated on past performance and is not indicative of future profits. You may lose a customer(s).
