Surely, everyone who is about to organize a business in UAE, wonders whether creating a new company from a scratch is a better choice than reorganizingan existing one. To deal with this controversial task some business insights have to be uttered and explained.
To start with, one should think about the essential variables for successful business launching. Unsurprisingly, the starting point of any business planning is the determination of its future location and respectively the overall business environment and play rules. From this prospect Dubai, as a place for starting a business, may unhesitatingly be called the right choice because of its strategic location, tax-free living, strong economic outlook and governmental directionality to turn the city into the world business hub.
When the place has been chosen, the main question that arises in the businessman's mind is How to reach the break-even point and start profiting by spending as little resources as possible. In this formula, time and money that are spent on necessary permits and licenses obtaining, the concept and design creating, the building repairing are in primary concern as far as this period appears the most costly for the company. The relation in the formula is quite simple - the less money is spent in less time the better for the business.
Buying any already existing business, it is possible to avoid time-consuming process for necessary documents and permits obtaining as well as time for renovation of premises, which may be up to a year in total. In case of purchasing a ready business, the re-registration will take only about month and minimum cash expenditure, so the entrepreneur gets an already functioning business in short time. For instance, opening a restaurant in Dubai requires 2 months for obtaining the license, 6 months for design and construction, another 2 months for getting the permits and staff recruitment. As we can see, the process of opening the restaurant from a scratch is going to take 10-12 months versus only a month in case of buying an existing one. Also, it should not be forgotten that during this “start period” the company carries out its fixed costs, so not surprisingly, fixed cost for 1 month is exactly 12 times less than for 12 months. Additionally, as the practice shows, a not-operating business are sold approximately 2 times cheaper it has been invested to start it.
To sum up, as it can be seen from all above mentioned, there are strong benefits and a common sense in buying an existing business, spending minimum time and money for restructuring and adapting business to match the concept of your business idea.