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Have you any particular rules for success? Is there anything you wish you'd known before you bought? What is changing in the industry? Are there any particular issues to do with regulation, customers or suppliers to be aware of? Would you buy a business in this industry now? If not, why not? Do you know any that may be for sale? WHERE SHOULD YOU BUY A BUSINESS? After thinking about what you want to achieve by buying a business, and the types of business that might enable you to do 46 / B U Y I N G A B U S I N E S S AND M A K I N G IT W O R K this, the next question that you need to consider is: where do you want to buy a business?

Distribution Distribution companies may either be acting as: transporters offering a service to manufacturers in taking their goods to market; or wholesalers offering a service to both manufacturers as a channel to market, and to retailers as a way of packaging industrial quantities of goods into amounts convenient for a retailer to stock. As facilitators, margins are generally low since the existence of a high margin would incentivise manufacturers to expand downstream into undertaking its activity and capturing its margin for themselves.

However, some entrepreneurial buyers will be deliberately interested in finding businesses that are loss making or in difficulties despite the higher risks involved. This is because you might be able to buy such a business relatively cheaply, while if you are able successfully to turn it around to be a stable, profitable and growing business you may then be able to realise a substantial capital gain. Buying an under-performing business to turn around can, however, be a very risky business and the issues involved are covered in detail in Chapter 19.

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