ECONOMICS
ENTREPRENEURS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Tax debt
|
|
|
Existing customers
|
|
|
Existing location(s)
|
|
|
Trained and experienced staff
|
Detailed explanation-1: -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-2: -You often need to invest a large amount up front, and will also have to budget for professional fees for solicitors, surveyors, accountants etc. You will probably also need several months’ worth of working capital to assist with cashflow.
Detailed explanation-3: -Being able to count on a reliable number of customers from the outset is one of the advantages of buying an existing business. The benefit is twofold: a solid customer base and a steady cash flow.
Detailed explanation-4: -Initial costs and activities have already been completed. Premises may be fitted out and tested. Legal structure may have already been established. Licences and registrations may be in place. Branding may be in place. 10-Oct-2022