BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The owner is able to generate income straight away if the business systems are working properly.
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Staff are experienced and trained in what they are doing.
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The business may already have a good reputation with strong customer loyalty.
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All of the above
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Detailed explanation-1: -There may be established customers, a reliable income, a reputation to capitalise and build on and a useful network of contacts. A business plan and marketing method should already be in place. Existing employees should have experience you can draw on.
Detailed explanation-2: -The answer is b. Capital is not required for a new business since it already exists. Using additional capital to purchase the business limits one’s total capital, which is considered a disadvantage.
Detailed explanation-3: -Understand the advantages and disadvantages of buying an existing business. equipment is installed and its productive capacity known; inventory is in place and trade credit established; the owner hits the ground running; the buyer can use the expertise of the previous owner; and, the business may be a bargain.