“For Luxury Academy, the real risks we’ve taken have been those that have ultimately led to growth, situations that have happened twice. The first risk we took was when we moved from targeting a small segment of the market to the larger luxury market and the second was when we expanded into India. Business risk often involves change, and change is something that people can shy away from based on the assumption that what is known is safer. But in business nothing stays the same forever, markets change, customer tastes evolve, the economy may falter or soar, and you have to be willing to make changes to survive. And, in most cases this involves some element of risk.”
Understanding whether taking on a business in debt or leaving these liabilities behind with an asset sale is right for you is an essential part of the buying process. Debt is common throughout the business world, particularly in the financial services industry. Having a clear understanding of a company’s corporate life-cycle during the valuation process often provides a reliable indicator of whether the purchase is viable for you, and whether the financial risk and business risk can be offset.
If you consider all the factors and calculate all the financial outcomes, there’s no reason why you can’t expand your business portfolio and profit from a business in debt.