New Venture Management: Advantages of Acquiring an Ongoing Business
Advantages of Acquiring an Ongoing Business
1. Already operational normally leads to success
2. The time and effort to start a new venture is eliminated
3. Possibility of buying an on going venture @ bargain price
The next step
1. Business environment
2. Profits, Sales & Ratios
3. Business Assets ( Inventory, equipment, trademarks, goodwill)
Questions 2 Ask
1. Why is the business being sold?
2. What is the current state of the business?
3. What is the current condition of the inventory
4. What is the current state of the assets
5. What is the current state of the employees
6. Goodwill
7. Competition
8. How profitable is the company
9. Negotiation
Franchise
Franchising is an arrangement is which the owner of a trademark, trade name, or copyright has licensed others to use in selling goods and services.
Advantages
1. Training & Guidance
2. Brand name appeal
3. Proven track record
4. Financial Assistance
Disadvantages
1. Franchising Fees
2. Control of Franchise
3. Unfulfilled Promise
Copyrights
A copyright provides exclusive rights to creative individuals for the protection of their literary or artistic productions.
• Must be in tangible form
• Protected for the duration of the author’s life and 70 years after death; 95 publishers, 120 after creation
• Fair use doctrine
• Material can be used for non profit educational purposes.
• The amount used in relation to the whole work
• The effect of the use on the market value of the copyrighted work
Trademark
This is a distinctive name, mark, symbol, or motto indentified with a company’s products and registered at the Patent and Trademark office.
Trade Secrets
Customer lists, plans, research and development, pricing info, marketing techniques, and production are examples of potential trade secrets. Duration – as long as it is not revealed to others.
Patents
A grant from the government that gives an inventor exclusive rights to an invention. Duration – 20 years from the date of
1. Already operational normally leads to success
2. The time and effort to start a new venture is eliminated
3. Possibility of buying an on going venture @ bargain price
The next step
1. Business environment
2. Profits, Sales & Ratios
3. Business Assets ( Inventory, equipment, trademarks, goodwill)
Questions 2 Ask
1. Why is the business being sold?
2. What is the current state of the business?
3. What is the current condition of the inventory
4. What is the current state of the assets
5. What is the current state of the employees
6. Goodwill
7. Competition
8. How profitable is the company
9. Negotiation
Franchise
Franchising is an arrangement is which the owner of a trademark, trade name, or copyright has licensed others to use in selling goods and services.
Advantages
1. Training & Guidance
2. Brand name appeal
3. Proven track record
4. Financial Assistance
Disadvantages
1. Franchising Fees
2. Control of Franchise
3. Unfulfilled Promise
Copyrights
A copyright provides exclusive rights to creative individuals for the protection of their literary or artistic productions.
• Must be in tangible form
• Protected for the duration of the author’s life and 70 years after death; 95 publishers, 120 after creation
• Fair use doctrine
• Material can be used for non profit educational purposes.
• The amount used in relation to the whole work
• The effect of the use on the market value of the copyrighted work
Trademark
This is a distinctive name, mark, symbol, or motto indentified with a company’s products and registered at the Patent and Trademark office.
Trade Secrets
Customer lists, plans, research and development, pricing info, marketing techniques, and production are examples of potential trade secrets. Duration – as long as it is not revealed to others.
Patents
A grant from the government that gives an inventor exclusive rights to an invention. Duration – 20 years from the date of