A business that got off the ground from zero entails lower costs and no immediate revenues. The image of a start up is shipped together with the business and involves time and money enough to return profit and attract clients. From this standpoint, a buyout would probably be the best profit-making solution amidst recessionary times, in contrast with a business started from scratch, according to Marius Ghenea, a renowned entrepreneur in Romanian business landscape.
A buyout seems a more effective solution
It surely depends on the concrete situation we are referring to. In times of crisis, what is already “built” costs less than “what’s still on the drawing board”. In a nutshell, a buyout seems the right way than a start-up, says Ghenea (photo).
“Taking a glance into the real estate industry during this housing crisis, my question is: what would you do if you had the money to buy a household? Would you rather dip your feet into an already built house (for which you can snap up the deal at a bargain price), or would you buy a house that it is very likely to lag on the drawing board? I would buy the house already built, even if it hasn’t been perfectly constructed and needs improvement or repairs. If I paid the money for a house under construction or pending for construction works, I wouldn’t be sure of how functional it would be, how much it would cost, and maybe the initial costs would turn out to be lower than the real ones”, he explained.
From here to the comparison between buying out a company and starting up a new one it is one step away.
Same as the previous ‘analogy’, with the real estate market, a buyout of an existent business entails first of all a thorough audit designed to identify the flaws and strengths of the business.
From this initial evaluation, similar to a SWOT analysis – a planning method used to identify the interna
