Advantages and Disadvantages of Acquiring An Ongoing Venture
Looking for advantages and disadvantages of Acquiring An Ongoing Venture?
We have collected some solid points that will help you understand the pros and cons of Acquiring An Ongoing Venture in detail.
But first, let’s understand the topic:
What is Acquiring An Ongoing Venture?
“Acquiring an ongoing venture” means buying a business that’s already running. It’s like getting a ready-made shop, where you don’t start from scratch, but take over the existing setup and keep it going or make it better.
What are the advantages and disadvantages of Acquiring An Ongoing Venture
The followings are the advantages and disadvantages of Acquiring An Ongoing Venture:
| Advantages | Disadvantages |
|---|---|
| Established customer base | High purchase cost |
| Existing business processes | Hidden liabilities risk |
| Trained workforce available | Possible staff turnover |
| Immediate cash flow | May inherit poor reputation |
| Lowered risk of failure | Difficulty in changing operations |
Advantages of Acquiring An Ongoing Venture
- Established customer base – An ongoing venture comes with an established customer base, meaning there’s already a group of consumers who are familiar with and loyal to the product or service.
- Existing business processes – When you acquire an ongoing business, you also receive their existing business processes. This can save time and energy as you won’t have to start from scratch.
- Trained workforce available – Having a trained workforce available is another benefit. These employees already understand the business, reducing the need for extensive training.
- Immediate cash flow – Immediate cash flow is a significant advantage. Unlike a start-up, an ongoing venture starts generating revenue from day one.
- Lowered risk of failure – Lastly, an ongoing venture typically has a lower risk of failure, as it already has a proven track record of success.
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Disadvantages of Acquiring An Ongoing Venture
- High purchase cost – Buying an ongoing venture can be expensive, as it often involves significant upfront investment.
- Hidden liabilities risk – There’s a risk of hidden liabilities, meaning unexpected debts or legal issues that weren’t disclosed during the purchase.
- Possible staff turnover – Staff may choose to leave after the acquisition, disrupting business continuity and increasing recruitment costs.
- May inherit poor reputation – If the venture has a poor reputation, this negative image could be passed onto the new owner, impacting customer trust.
- Difficulty in changing operations – Changing the existing operations can be challenging due to established systems and resistance from employees.
That’s it.
Also see:
- Advantages and disadvantages of Absolute Poverty
- Advantages and disadvantages of Absolutism
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