With millions of small businesses opening every year, now is the right time to make the investment. As you embark on the path toward business ownership, you’ll need to decide whether to buy an established company or build one from the ground up. Here, we list the advantages of purchasing an existing business.
Equipment and Furnishings
In most deals, the purchase price includes the land upon which the company is built, as well as its equipment and furnishings. If the deal doesn’t include these items or you’re starting from scratch, the costs will add up fast. To get the most out of your investment, consider hiring a business broker who can explain listings and pertinent details.
It’s Less of a Risk for Buyers and Lenders
Buying an established business is seen as being less risky than building one from scratch. With new companies come expenses such as real estate, hiring, training, education, equipment, inventory, and more. Established businesses, however, typically include most or all of these in their asking prices. Furthermore, banks and lenders see the purchase of an existing business as a low-risk transaction because the company’s success has already been proven.
No Staffing Problems
When getting into an existing company, its loyal employees will likely want to stick around. There’s no need for expensive and time-consuming training, and they can provide valuable advice and insights to an owner that’s new to the field. When employees have worked with previous owners, they can shed more light on a company’s strengths and weaknesses.
Built-In Expertise and Experience
If you’re going into the industry with no experience, purchasing an existing company is an excellent way to get your feet wet. Both the previous owner and the staff are great sources of information, so it is wise to keep the lines of communication open during the transition.
An Established Customer Base
Along with employees, existing customers will also want to see the company continue its success. Loyal clients will be able to offer suggestions on how to improve the business, so it’s best to listen to their past experiences and look for ways to improve them in the future.
Getting Into a Thriving Company
For a new business owner, the first year of ownership is the most important. When entrepreneurs buy existing businesses, however, they’re usually buying companies that have reached or surpassed that milestone. Although a company’s success may depend on several factors, investing in one that’s already beaten the odds will give a new owner a significant advantage.
Enjoying More Freedom
Purchasing a business might not seem as exciting as building one from nothing, but a creative buyer can still implement all the strategies they’ve come up with. Once the investment has been made and the papers have been signed, any buyer can make a company their own.
Buy an Existing Business and Reap the Rewards
Buying an established business can be just as rewarding and challenging as building one. When you’re considering the purchase of a business, be sure to research your options and work with a local business broker. The team at CGK Business Sales can provide the advice, assistance, and insight needed to ensure a successful purchase and a seamless transition of ownership. Request additional information online or call today to get started.