Canadian Franchise Opportunities | Looking for a Business to Buy in ...

So, you have some money and are looking to buy a business in Canada. What could possibly go wrong? Surely there are thousands of operating businesses for sale, you just need to find the right one. You may want to ask yourself (and then the owner) why the business is for sale. Is it about to fall over the cliff and plunge into a financial black hole?

Why Business Owners Sell

According to Statistics Canada, businesses fail primarily due to weak or poor management, marketing or finances. In fact, one of the main causes of failures in independent businesses was low revenue. In 2001, of businesses that had revenue of $30,000 or less annually, only 55 percent of them survived beyond their first three years. Only around 36 percent made it five years or more. That, again, was in 2001, a relatively stable financial year. What the rate is in 2012, during a global economic downturn, would surely be substantially lower. When businesses are ready to sell, the odds are that the owner is suffering. In a large percentage of cases, you would be buying someone?s problems. There are solvent owners who want to sell their radically successful businesses but they are few and far between. Sickness, retirement or other reasons may force owners to sell. That you would be the lucky one to stumble on such a deal are in about the same odds as finding a Monet painting at a garage sale.

Another Option ? Considering Buying a Franchise

An established independent business for sale would have to be researched, thoroughly. Years of financial documents would need poring over, litigation investigations followed, property deeds verified and customers/suppliers contacted.? A franchise could be your best option for an established business. There are so many advantages to franchising:

• A franchise is an established and proven business model.
• Buying into a franchise business starts fresh from the territory you?re in. There is no chance of finding bad baggage from previous suppliers and customers left over from purchasing an independent business.
• You get intense training from most franchisors so that you are prepared to start on day one. Training from a former stand-alone business owner may be sketchy at best. Your new business purchase may slide backwards at the outset while you essentially train yourself.
• Your purchase of a franchise will usually be a fraction of the cost of buying a stand-alone business. Even though royalty payments are issued over time to the franchisor, they come out of profits you can calculate you?ll make with a reasonable certainty.

Unless your expertise in business is near the genius level, buying an independent business from a sole owner is a serious risk. ?Buying a business in Canada may work better for you than the previous owner. However, a franchise investment is far less of a gamble.

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About the Author, CFO Team

The Canadian Franchise Opportunities team is a dedicated group whose primary purpose is to help inform those exploring franchising as a potential business model. We believe that through education we can help prospective franchisees make better decisions when evaluating, selecting and buying a franchise.

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Source: http://www.cafranchiseopportunities.com/business-to-buy-in-canada/

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