GK
BUSINESS MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The owner is able to generate income straight away if the business systems are working properly.
|
|
|
Staff are experienced and trained in what they are doing.
|
|
|
The business may already have a good reputation with strong customer loyalty.
|
|
|
All of the above
|
Detailed explanation-1: -A market for the product or service will have already been demonstrated. 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.
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.
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
Detailed explanation-5: -Mentorship. The existing owner is often willing to stay on for a period of time to mentor the incoming owner. Cash flow. An existing business already has customers and continued cash flow. Financing. Established Name and Reputation. Current Staff. Market Position. 02-Mar-2016