Buy a business, or start from scratch. The pros and cons

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Entrepreneurship,Acquiring A Business

For some entrepreneurs, ‘startup life’ simply isn’t the right path. Is buying an established business a viable alternative?

Karen Man and her husband Elliot Pobjoy did not consider themselves entrepreneurial types until a few years ago. A dentist and a lawyer, respectively, they fit the classic “work your way up while working for someone else” mold.

“We wanted to create a warm, family-centric environment where exceptional clinical care is delivered with compassion – thus, SmileGrove Dental was born.” “Now is an incredibly favourable time to consider buying a business, particularly from retiring owners,” says Iggy Domagalski, a serial entrepreneur who has started, bought or sold more than a dozen businesses, and currently leads industrial service provider Wajax.

“Buying a business from someone retiring can be a great strategy if certain conditions are met. Specifically: if the business is profitable, if it’s in a recession-proof industry, if it doesn’t have ‘key man risk,’ meaning it can survive without the owner, and if it can benefit from a tech injection to make the profit margins bigger. A tech injection could be as simple as a website and a Google Business listing.

Along with the seller, they agreed to hire a reputable third party to thoroughly evaluate the business, from financial statements to the patient base and the equipment. Their accountants were brought on to ensure the business had a fair evaluation. Once they’d negotiated a price, lawyers came on board to ensure all the paperwork – transfer of assets, staff employment agreements – were handled properly.

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