Introduction
This is an analysis paper that seeks to assess a business to purchase. The chosen business for analysis is Gentlemen’s Top Option, Burlington, Vermont. This is a full-service salon planned exclusively for men. The services offered include men's grooming, men's haircutting, face shaves, coloring, hair removal, massage, and others. To analyze the business it is necessary to evaluate its model; assess requirement training that is required to run it; identify issues to scrutinize in regard to feasibility analysis and due diligence. The paper concludes with advantages of purchasing the business rather than starting a new one.
Business Model
As an entrepreneur, it is essential to evaluate Gentlemen’s Top Option’s business model prior to thinking of ascertaining its line in the market. An enterprise’s business model denotes its structure or illustration of how it aims to contend, utilize available resources, framework relationships, interact with clients, and generate value to maintain itself on the foundation of the income it generates (Osterwalder & Pigneur, 2013).
The enterprise is located on the Lake Champlain Waterfront in the business district of Burlington, Vermont; it has been giving quality in men's individual care services. The view is attractive, and customers can access with ease. The business’s trained and dedicated men’s care specialists are recognized for their quality and customer service. The customers are treated professionally, and thus the business has loyal customers and attracts additional ones. GTO mission supports customer attraction and retention through fostering customer devotion and earning client respect via outstanding communication, care and customer service (Osterwalder & Pigneur, 2013). They give customers discriminating options in grooming and hair services. Customers get their own exclusively run salon that has privacy considered from booking to delivery of services. GTO is committed to providing a harmonized working environment by believing that the founder and staffs contribute equally to the business success. GTO believes that their customers are the kings, and it upholds respect for every stakeholder of business, clients, suppliers, vendors, and community.
Necessary Training
Business is entirely people oriented despite industry, service or product offered. Every day entails encounters with a range of individuals including employees, consumers, suppliers and business acquaintances. Developing negotiation and communication skills is priceless in a variety of situations from bargaining a supplier agreement to dealing with a complicated customer. The seller would have to train on how he should be handling various stakeholders.
GTO’s Feasibility and Due Diligence Assessment
There are many issues to consider when conducting a feasibility study. In this case, market feasibility is one issue that would assist to evaluate whether the market situations, especially competition and demand, generate opportunities. Technology and corporation feasibility, this is necessary to assess whether GTO has the assets and resources to deliver (Gartner & Bellamy, 2010). Financial possibility, business entailing financial investment, and this is an issue that assesses whether the project or venture makes financial sense. Lastly, solutions development; from the possibility analysis, it is possible to create possible solutions to formulate the venture's return even higher.
Due diligence is an examination into a corporation or enterprise to discover any business or financial matters that may not be revealed or disclosed sufficiently by the body that is being analyzed. To assess due diligence of GTO business, the following issues must be assessed. They include financial audit, compatibility audit, legal/environmental audit, macro-environment audit, technical audit, marketing, and management audit (Gartner & Bellamy, 2010).
Negotiation Areas
Business purchase is a venture that must have a legal contract that would abide the agreement. It is an area that must be negotiated to ensure that no pitfalls and challenges are left unattended.
The business operation time frame is stated as Monday-Friday 8:00am - 7:00pm and Saturday 8:00 am- 4:00 pm. This is an indication of insecurity threat or low customer turnout. Most of the offices close by 5pm, so the closing time is early due to the security issue or low customer turnout. Therefore, this is a negotiation areas since grooming business should be all through weekends and at least up to 9pm in the evening.
Profit and income of the business is also an area of negotiation since the financial implications of the business must be made available. It is a negotiation area since the business is not transparent on the finances issues. Apart from the profits report, the cost of purchasing the business is an area of negotiation.
Employees loyalty are subjective, this is to say change of management will impact on employees’ loyalty and dedication. It is necessary to negotiate on this so as to ensure that the employee matters are handled well and professionally. Other stakeholders of the business may have a different approach or perspectives in regard to sale of business. Due to such foreseeable issues, it is necessary to negotiate the stakeholders’ fate. Available stock prices are negotiable. The payment mode for the business is also a negotiable area.
Advantages of Purchasing the Business
- Purchasing GTO comes with the benefit of customer share, brand recognition, and additional goodwill of the business.
- GTO has well trained employees capable of delivering the organizations goals, thus reducing and eliminating the necessity to interview and recruit fresh employees.
- Due to their trust-based operation with stakeholders, it is possible to get the advantage of favorable credit conditions from suppliers who have a venerable association with the business (Barrow, 2011).
- The business can operate with existing legal consent as necessary changes take time to be implemented. This saves the new investor the high setting up costs.
- It is less costly to purchase GTO than to start a fresh business since more facilities are already available, customers are already aware of the outlet and the setting up cost including the legal costs are already incurred.
Disadvantages of Purchasing the Business
- Restricted expansion to accommodate women customers since the business is men oriented.
- There is less independence in some commerce decisions.
- Restraint of commerce provisions on the purchase or sale of the franchise that may be more burdensome than necessary if a non franchised commerce is sold.
- External issues, like increasing rivalry or a dilapidated industry, can negatively influence future growth (Barrow, 2011).
Conclusion
In general, it is advantageous to purchase GTO than starting a fresh one. This is due to the study of feasibility analysis and diligence that provide a profitable outcome, indicating that there are more benefits in acquiring the business that establishing a new enterprise.
