The Benefits of Buying an Existing Business
Starting a business can be the fulfillment of a lifelong dream. There is nothing to compare with being your own boss and being able to set your own schedule. For aspiring entrepreneurs, there are generally two ways to go into business: start your own or buy one that is already established.
If you have limited financial resources, starting from scratch might be your only option. However, if you have the funds and/or are able to obtain financing, buying an existing business can offer several advantages. These include:
Established Business Model: There is generally far less risk in buying an existing business, because you are not only purchasing the assets within the entity, you are also purchasing a proven business model that has demonstrated the ability to compete in the marketplace.
Known Brand: Every business has a brand, or an identity within the industry it serves. A positive brand can only be built over time through marketing and delivering an exceptional customer experience.
Immediate Focus: When you are building a business from the ground up, there are numerous one-time tasks that must be completed during the startup phase. Unfortunately, these tasks can distract you from doing the things you need to do to operate the business successfully. When you purchase an established business, the initial legwork has already been completed, and you are free to focus on building the business.
Customer/Client Contacts: One of the most valuable assets in any business is the customer/client base. It can take several years to build a base of loyal patrons that trust your brand. With an existing business, you gain the benefits of the previous owner’s customer acquisition efforts.
Trained Employees: Your employees are the ambassadors of your brand, and we all know that hiring and training good employees is a challenging undertaking. Buying into a business gives you a built-in base of employees that (in many cases) understand the intricacies of the business better than you do.
Predictable Cash Flow: When you put everything else together, perhaps the best benefit of purchasing an established business is the ability to see an immediate return on investment based on the cash flow and profits you can reasonably expect. This lowers your risk significantly, and should allow you to immediately earn a living from your new venture.
What Business is Right for You?
Though there are numerous potential advantages to purchasing your own business, there are still some risks involved, and things may not work out the way you planned. Before moving forward, it is essential to find the right business to suit your passion, skills and budget. The best place to start is to speak with an experienced business broker who can help find an available business that will be a good match for you.