To become a business owner, you don’t have to create it from scratch. You can buy it from another entrepreneur - like buying, for example, real estate or a car.
On the one hand, it’s convenient: you can get a ready-made case. On the other hand, there are so many pitfalls that even an experienced entrepreneur will find it difficult to buy a good company. Reconomica will tell you more about buying an existing business and whether it’s worth doing .
How much can you buy a small business in Russia for?
How much does a ready-made business cost? Contrary to popular belief, purchasing a ready-made business is available to almost any Russian family with small savings. Another question is: do you need this “pig in a poke”?
Average selling price of a ready-made business in 2020 - statistics
The average cost of a ready-made business in Russia is about 505 thousand rubles (as of the 3rd quarter of 2020, according to analytics from the Yula ad service).
This is approximately 21% less than in the 2nd quarter of the same year - when companies were put up for sale for an average of 640 thousand. But the average price of a real transaction is even lower. In fact, the seller wants to receive an average of 505 thousand for his enterprise, and after bidding, real prices average 267 thousand . That is, during negotiations, buyers reduce the price by almost half. If sellers agree to this, it means they are ready to sell their business in any way (why would that be?).
Which businesses sell more often?
Small businesses are the most popular. There are several reasons for this:
- low entry threshold: even people with an average salary can save half a million rubles;
- relatively low responsibility: in a small business you will not manage an office of several dozen employees and equipment worth tens of millions.
Cost of selling a small business by area of activity
Now we present the average prices for companies in different fields of activity (as of the 3rd quarter of 2018):
- construction: 349 thousand;
- agriculture: 870 thousand;
- hotel business (hostels, mini-hotels): 1.53 million;
- production: 731 thousand;
- car washes, car services: 533 thousand;
- online projects: 394 thousand;
- catering: 355 thousand;
- beauty sector: 349 thousand;
- trade: 236 thousand.
Compared to the previous (second) quarter of 2020, there is a significant decline in almost all industries. Prices increased only for companies in the niche of online projects (by 101%: in the 2nd quarter they sold on average slightly less than 200 thousand). In all other directions, prices fell by 10-20%.
If we compare industries by popularity, then the greatest supply and demand is in the following areas:
- trade (shops, retail outlets, stalls): 41%;
- beauty sector: 15%;
- catering: 13%.
Don't give up on outdoor advertising
If you have an offline business and have recently opened, use outdoor advertising: for example, hang a sign or poster. A person looking for services or goods will pay attention to it, and someone will come in out of curiosity and also buy something. The main thing is that the advertisement makes it immediately clear what you offer.
Outdoor advertising is effective - according to research, it brings in $5.97 for every dollar invested. But be careful - some cities have introduced restrictions that prohibit advertising of a certain format. Please check the law before using it.
Launch time: from 2–3 days.
Budget: from 1,000 ₽, depending on the company that will produce outdoor advertising.
Why would anyone sell the goose that lays the golden eggs?
Why do people sell their businesses? There are several typical reasons, and most of them do not bring anything good for the future buyer.
- There is no time/desire/energy to study. This may happen because a person underestimated his strength when starting a business, some problems arose during his work, or he was simply tired of doing it.
- There is no desired profit. It often happens that there is no profit at all, or the enterprise is operating at a loss, or there is a profit, but it is small and does not grow.
- I needed money urgently. The following situation also happens: a person’s business is going well, he likes to do it, but for some reason there is an urgent need for money. This is exactly the situation that is beneficial for the buyer.
- The business was initially made for sale. Usually more experienced entrepreneurs do this. A more common pattern for online projects than for offline companies.
- The topic is "burnt out". Some activities are not always relevant and may lose demand over time. A cunning owner can put the company up for sale when demand has already begun to fall, or even before the fall begins (if he foresees such a situation). The simplest example is hoverboard rentals or vape shops. A few years ago, these topics were fashionable and in demand, but quickly became crowded with entrepreneurs. And the clients who initially paid for the novelty got used to it, and their number decreased.
The problem is that the seller may lie when the buyer asks him about the reasons for the sale. Of course, it’s worth asking about this, but you don’t have to take his word for it.
How to negotiate when buying an existing business
When purchasing a business, you should seek outside help.
As a rule, experienced businessmen have established connections with bank employees, a lawyer and an accountant. Beginning entrepreneurs need to establish relationships with people who offer such services. The help of these professionals will always come in handy. An accountant will help you review and evaluate financial records. An experienced accountant will be able to determine how fully they reflect the state of affairs in the company. The lawyer should instruct you regarding the terms of the sale, as well as correctly draw up the contract and other documentation. The help of bank employees will be needed if you need external financing. In addition, these people can provide information regarding possible sellers of the business.
Before you make an offer to purchase, you need to collect complete information about the seller to understand why he decided to sell the business. Try to find out all the data about the company's activities, licenses, contracts, mortgages, patents, intellectual responsibilities, rights and the like. It is important for you to understand exactly what you are dealing with.
After conducting research and preliminary discussions with the seller, you can make a formal offer and move on to negotiations. Don't be surprised if you are required to post a deposit. This is normal practice. Thus, you will demonstrate to the seller the seriousness of your intentions.
During negotiations, as a rule, both parties voice maximum and minimum proposals, after which they gradually soften the conditions. You should determine in advance the terms and price that will satisfy you. Naturally, start with conditions that are more favorable to you, to which the seller may respond with demands that seem unfair to you. This is how most trades work. Always work towards terms you can accept.
It is important to keep strict boundaries. Once you have negotiated down to a realistic price, stick to it. This can be difficult as the seller will likely try to reverse the tide. Resist any pressure or unreasonably short payment terms. You should be wary of the seller's demands to complete the transaction as quickly as possible. Show healthy suspicion. Don't forget that it's better to waste time negotiating than to spend a lot of money on a losing purchase.
Immediately refuse a deal that seems dubious to you, even if you spent a lot of time and effort on it. You should also beware of any seemingly unrealistically profitable offers. A failing business will not bring profit.
( 1 votes, average: 4.00 out of 5)
Is it worth buying an existing business?
To summarize: for most people who are interested in this, no, it’s not worth it. The main question that should pop up in your head when you see an advertisement for the sale of a profitable business is: why is the owner selling such a successful company?
There is a ton of this stuff on Avito!
Who can take the risk
It’s worth buying a ready-made business only if you are an experienced entrepreneur who knows how to analyze a proposal very deeply, has the money to correct and improve it, and has experience in this particular field of activity.
In other cases, and especially if you are new to business, such a purchase is likely to only bring problems.
Problems are possible for 2 reasons:
- you will make a mistake in assessing the company and buy a business that is falling apart;
- you will buy an established business, but ruin it yourself (due to lack of practical experience).
Is it worth opening a franchise?
This applies to both a “separate” business and the purchase of a franchise. Only if you buy a company will you be its owner. If suddenly things don’t work out, the company can simply be closed, or slow down, or make some changes.
But if you start a franchise business and something doesn’t work out, you won’t be able to just finish the job. All franchisees (companies that buy a franchise from a brand) sign an agreement under which they are obliged to pay a certain amount monthly or make a purchase for a certain amount.
Successful business owner: What skills does he need and why?
How to run a business so that it doesn’t fall apart as soon as it gets started? This is a question that worries both novice businessmen and owners with some experience and knowledge. Any enterprise is the result of the active work of the manager and team.
However, in addition to this, the organization is a unique reflection of the owner’s personality: his principles, beliefs, determination, energy, and ability to calculate the situation in advance.
Therefore, the first thing to start with is changing your mindset. The owner must have a possessive approach, because when assessing the development process from the point of view of an employee, it is almost impossible to achieve sustainable progress.
How to run a business: the most important thing
There are a lot of tales circulating in the philistine environment about the incredible complexity of entrepreneurship: high competition, the state stifles with taxes, regulatory authorities with inspections and fines. These rumors are partly true, but practice shows that most often startups fail not because of an aggressive external environment, but due to erroneous actions of management.
Where to begin
Non-profitability in the first months of promotion of an enterprise is a completely normal phenomenon. However, a surprising number of people start a business without even trying to figure out their break-even point. Meanwhile, this does not require any extremely complex calculations: just add up all your monthly expenses, and then calculate how much goods or services you need to sell in order to at least not go into the red.
Another common mistake is the desire for an ideal start: an office in a prestigious area, high-tech equipment, a strict dress code for employees. In fact, it is much more important to make sure that your products are in demand: if there is no demand for it, then in a couple of months you will be forced to sell your top-notch equipment in order to pay off the loan payment.
So, how to run a business so that it is successful? The answer is simple: your focus should be on customers and sales.
Clients
Personnel Planning Systematization Management Finance
It’s a truism: without customers there is no business. However, many beginning entrepreneurs do not think about any specific schemes for attracting the target audience, hoping that the buyer will come to them himself. This approach only works in very few business niches, and besides, sooner or later you will still be replaced by more entrepreneurial competitors.
About half of your time should be spent working with clients. This concept includes several aspects:
Tags
Management
Business service
Consultation
You can call and describe your task (problem) in the “Ask a Question” form on the website. We will contact you and offer a solution. Contact WhatsApp+79169906144
Project support
Often the customer wants to outsource the project. The subscriber support project includes:
- Strategic sessions (consulting),
- Market analysis, product supply chain analysis,
- Organization of business correspondence,
- Search, selection of buyers (product sales),
- Preparation of negotiations with customers (presentations),
- GR project support (Regions, Chamber of Commerce and Industry, Ministries, State Duma, Embassies),
- Comprehensive consulting on issues related to project implementation.
Training
- Information on export activities;
- Consulting on export activities, including through the involvement of third-party experts;
- Assistance in the formation and promotion of export and corresponding investment proposals, including the preparation and translation of presentation and other materials into foreign languages;
- Organization of meetings and negotiations with foreign business entities;
- Creation and (or) modernization of a website for an export-oriented SME
- Assistance in organizing the participation of SMEs in international exhibitions, fairs and congress events in the Russian Federation and abroad;
- Organization of webinars, round tables, conferences, forums, seminars, master classes and other public events on the topic of export activities for SMEs;
- Assistance in organizing the participation of export-oriented SMEs in international business missions;
- Assistance in organizing the participation of export-oriented SMEs in interregional business missions - collective trips of representatives to other constituent entities of the Russian Federation with preliminary organizational preparation, including identification of potential interested parties, if necessary, exhibiting and showing goods (work, services) for the purpose of their promotion, identification the degree of interest in cooperation and receiving feedback, preparing the necessary presentation and advertising materials, and conducting bilateral business negotiations, in the event of the arrival of a delegation of foreign entrepreneurs - potential buyers of SME products in another constituent entity of the Russian Federation;
- Assistance in bringing goods (work, services) into compliance with the requirements necessary for the export of goods (work, services): certification, obtaining permits, testing, etc.;
- Assistance in ensuring the protection and registration of rights to the results of intellectual activity in the Russian Federation and abroad, including conducting patent research, in order to determine the current patent situation in foreign product markets provided for by projects of export-oriented SMEs, including checking the possibility of free use of products without dangers of violating existing patents; analysis to identify potential counterparties and competitors, identify and select objects of licenses, acquire a patent;
- Assistance in conducting marketing research - collection, accumulation and analysis of data on the state and trends of changes in markets, segments and their individual participants and institutions that may influence the position of the company or its individual products in the market, which are the basis for making marketing and management decisions, — on the introduction of a specific product of a small and medium-sized enterprise to the foreign market.
- Preparation and examination of an export contract at the request of a small and medium-sized enterprise.
- Assistance in placing a small and medium-sized enterprise on international electronic trading platforms, including assistance in registering an account, as well as monthly promotion of the products of a small and medium-sized business on an electronic trading platform.
- Assistance in searching and selecting a foreign partner, including searching for potential foreign partners, establishing communication with them, including conducting commercial correspondence, initial telephone conversations and (or) negotiations using video conferencing, sending trial products, checking the business reputation of a potential partner, assistance in conducting business negotiations, examination of an export contract, consulting on logistics and customs issues.
- Conducting export seminars
- Organization of individual trips of a business entity outside the territory of the Russian Federation for the purpose of conducting negotiations with a potential buyer of goods (works, services) and the subsequent conclusion of an export contract.
- Assistance in obtaining services and support measures from other organizations, including development institutions and federal funds.
Challenges and benefits of attracting customers in a small business
First, let's determine which companies are considered small. Representatives of large businesses operate throughout the country or even abroad, have thousands of employees, branches, and large scale production and sales. These are companies such as Apple, Samsung, Nestle, Auchan, Lukoil, MegaFon, KYIVSTAR, WOG, Comfy, Amazon and others.
Small businesses cover a small area. It employs from a couple of people to several dozen. Sales and production volumes are small. Small businesses include stalls, shops, hairdressers, etc.
A small business owner has many tasks on his or her shoulders. This results in a lack of time and almost round-the-clock employment . The lack of large resources does not allow you to take risks, conduct large-scale advertising campaigns or hire expensive specialists to develop and implement promotion campaigns. This is where the main difficulty lies. After all, fast results for little money are important for small businesses.
On the other hand, small businesses are more flexible . It is easier for a small enterprise to adapt to rapidly changing market trends and change direction. Interaction with the target audience is more personal, therefore the level of trust in the company is higher . Local low-budget advertising .
Read on the topic Beauty salons and fitness centers are also small businesses, and ordinary “word of mouth” works most effectively there. But there are more reliable ways to attract customers there.
Back to Contents
Where to find clients: proven tips and tricks
Now I’ll tell you an obvious fact - the more clients, the better for your business. Of course, you yourself understand this perfectly well. Above, I have already talked about several ways to find clients. Now I want to tell you more about where to find clients. Advice - proven, effective, effective. Be sure to listen to them.
How to find clients: participation in thematic conferences and seminars
Excellent results can be achieved by simply participating in thematic, specialized, industry conferences, seminars, exhibitions and other similar events. Not only will you learn better what to expect from your competitors, but you will also be able to meet potential clients.
By the way! Look for information about such events on specialized websites. Try to find an organization or association related to your activities and the products you sell. Sign up for newsletters from such organizations. This way you won't miss the event.
Establish contact with enterprises and institutions that may be your potential clients
Of course, this advice is relevant for those who offer specific goods/services aimed not at the retail client, but at the “corporate” client - that is, at organizations, firms, enterprises.
For example, if you are engaged in the sale of goods for cleaning services, then your clients will be companies that provide such services. Or the institutions themselves, because they often have an employee responsible for order in the office.
Introduce yourself in places with a large flow of people
This advice on where to find customers is only suitable for those who sell consumer goods. Or provides the same broad services. Distribution of flyers, leaflets, invitations and limited-time discount coupons should be carried out in places where a lot of people pass. For example, in a subway passage, on a busy street or intersection.
Also, this method will allow you to convey a lot of useful and valuable information to potential clients:
- about the address of your store;
- about the start of a new promotion;
- about the opening of a new point;
- etc.
Note! On leaflets/flyers, be sure to publish the address of your store and contact information with directions.
To achieve maximum effect and get the best possible result, adhere to the following rules:
- use the services of professional promoters;
- create high-quality sales leaflets;
- do not skimp on paper;
- choose places where the largest number of people from your potential audience can be found.
Thus, investments in organized distribution of leaflets will be as effective as possible.
