You might decide to buy an existing aromatherapy practice or complementary medical centre rather than start your own venture from scratch. Buying a going concern can mean that:
- the premises, equipment and furnishings are already in place
- there is an established, loyal client list
- the business can generate income immediately
- suppliers have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- staff are already in place
- the business website has already been set up
However, it's a good idea to look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.
Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- whether the vendor intends to keep on practising in the same area. If this is the case it is quite likely that some - or even all - of the existing client base will migrate with them so you may not be able to count on having a core of regular clients right from the start
- the state of the premises, fittings, equipment and so on. Will you have to spend money refurbishing or replacing assets
- how you will retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller. If you are planning to make big changes to the range of therapies available to clients you may have to work hard to build up your client base
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.