The Benefits of Buying an Existing Business
When a person chooses to go out on their own and purchase or start a new business, they wonder if there are benefits associated with buying an existing business. There are. The following are a few of these benefits.
Buying a business comes with less risk than starting one from scratch. When a person starts a company from the ground up, they must invest in real estate, spend money searching for and hiring new employees, buy equipment, and more.
In addition, once everything is in place, the entrepreneur must train the employees and market the business. This comes with additional costs that are eliminated when a person buys an existing business.
One major benefit of purchasing a business is that the new owner knows exactly how much they will pay. There may be an unexpected expense or two, but not like what is seen with a new business.
Banks consider businesses for sale less of a risk than those that are starting from scratch. They have proven track records, so banks are more willing to lend funds for the purchase. A brand-new business doesn’t have this track record, so obtaining funding can be a challenge.
A Support Team
A new business owner has a support team in place when they choose to purchase an existing business. They can turn to employees when they have a question regarding operations or call on one of the experts the former owner used. This is of great help, as the new owner has a network of individuals they can count on. An entrepreneur who is starting a business from scratch may not have these resources.
Customers will appreciate seeing familiar faces when they visit the business, even those who are aware the company has changed hands. When they see people they know, they have confidence that many things will remain the same as what they saw with the former owner. They may also be more willing to accept the changes the new owner chooses to make when they see the employees they know are comfortable with these changes.
Every business owner will encounter problems at times. However, when starting a new business, these problems can feel overwhelming. The owner may be discouraged and choose to give up. There tend to be fewer problems when a person buys an established business.
Countless people choose to buy used cars today to save money. However, they also so do because they know the previous owner has probably already experienced problems found with the particular make and model and had them fixed. The new owner benefits in that depreciation isn’t of as much concern to them and they have a car that already has many of the kinks worked out.
The same holds when a person buys an established business. The previous owner has already discovered many problems and found ways to overcome them. Failing to do so could have led to the business closing its doors before it went up for sale.
However, a person must do their due diligence and uncover any lingering problems that could doom the business. An owner looking to sell with highlight the strengths while downplaying the weaknesses. It’s up to the buyer to uncover these weaknesses and determine whether they are of concern going forward.
Consider the above when deciding whether to buy an existing business or build one from the ground up. Each option has its benefits that a person should consider. However, many people find an existing business meets their needs in every way. You may do the same.