5 Factors to Consider Before Buying a Scrapbooking Business

Some people may think that starting a scrapbooking business of their own will require them to establish the business from the ground up. But that is not always the case, because if you take the time to do a bit of homework, you may find that you can take over someone else’s scrapbook business. This is a great way to get a head start on your competition while saving yourself from all the trouble and hassles that usually accompany a fledgling enterprise.

However, just because you’re taking over a scrapbooking business does not mean that you’re free and clear from all the work. You still have to do a lot of research and carefully study the business that you are buying. If you fail to do so, it could very well mean the failure of your business later on. There are thousands of other businesses from all other niches that fail to get off the ground, just because the owners did not do their research well. You wouldn’t want to be the next, would you?

With that said, here are the basic but highly important factors that you should consider before buying a scrapbooking business:

1. Think about why the business owner is selling.

There are a lot of reasons why a business is being sold by its owner. Some may find that they don’t have the time anymore to properly manage the business, usually because they also have other things to take care of. Others might have moved on to something else, or maybe they want out because they’re not getting the results that they wanted or expected.

If the business is not making a profit, that could mean that the business is not being marketed to its fullest potential. Maybe the owner failed to consider if there is enough demand in the area for the services or products that she is selling, or maybe the location is not the best place for this type of enterprise. Lack of profits could also mean that the services or products are not good enough to attract a solid customer base.

2. Think about the work that is needed.

If the scrapbooking business that you’re planning to buy is already established in a nice location and has a loyal customer base, then you’re lucky enough to hit the ground running, and would not have to do a lot of work to get started at all.

However, if the business you’re buying has been losing money, then it could mean that you’ll have to do as much work as it takes to build a business from the ground up. You might need to improve the quality of the products and services, or maybe fix the pricing, or even remodel the entire marketing strategy itself.

You should think about how much work you are prepared to do when you finally sign the contract and the scrapbooking business is handed over to you. Are you ready to start from “square one” and rebuild the business from scratch, or were you planning on acquiring a business that is already earning money (which usually means less work)? Make sure that you’re ready to handle everything that your new business throws at you.

3. Think about any extra benefits or properties that are included in the sale.

Buying an existing business sometimes allows the new owner to acquire a few more properties or benefits than what she first expected. For example, it is common to see brick-and-mortar stores in your area having their own websites online. So your newly-acquired scrapbooking business might also net you an established website with more loyal readers and customers.

This is just an example, of course, but not all new owners might be pleased with the thought of having a website to take care of aside from the actual store. For a lot of people, it could mean extra work that they don’t have time for. If they don’t have the technical skills to maintain a website, that means that they will also have to hire another person to take care of online stuff, or else risk losing the website entirely.

Aside from the website, you should also consider the brand name of the business you are buying. Do you like it, or do you feel that it could be better? Are there any existing employees that the old owner hired? If so, what are your plans for them? Some new owners would prefer to continue the business with the same people, while others might want to hire new staff members when the deal is finalized.

4. Think about the actual cost of buying the business.

You are going to see a lot of owners trying to sell their businesses according to sentimental value, and not really according to the fair market price. Don’t get me wrong; I totally understand the reasons why they would do so.

After all, these owners must have spent a lot of time, money, and effort in building up and developing their businesses, so even if that scrapbook shop you’re buying is only worth a few thousand dollars, the owner might want to sell it for twice its market value, because of the emotional attachment she has for it. However, you can also understand — from a business point of view — why buying the business at this price would be highly impractical.

I’m going to give you another example. A friend of mine was once planning on buying a scrapbooking website, which the owner was selling for $8,000. However, the website’s net monthly profit was only $300 on average. It was not a good buying decision any way you looked at it. So this is just one of many reasons why it is so important to do some research before finalizing any deals.

5. Think about the legal and tax significance of your acquisition.

You should make sure that you always have your lawyer and accountant present during negotiations and transactions. This is most important when buying a business of any size or scope. Your new business will have a direct influence on your taxes, so ask the help of your accountant on this one. There will also be laws that apply to business take-overs or acquisitions, so your lawyer can help you make sure that you’re not committing any violations.