As you begin to take the first steps to owning a business, it is wise to think about the benefits of buying an existing business.
Read on to discover the advantages of buying an existing business versus starting your own.
Benefits of Buying an Existing Business
Before becoming a business owner, research the benefits of buying an existing business to make sure you make the right decision:
1. Low Risk Investment
Buying an existing business is considered a low risk investment compared to starting your own business from scratch. With a new company comes the costs of real estate, hiring new employees, education and training, equipment, furniture, marketing, and more.
Unlike a new business, an existing business can include most of these in the sales price, depending on the transaction. Additionally, banks consider buying an established business low risk because the company is a proven success, unlike new businesses which may be experimental.
2. Current Staff
When buying an existing business, employees who are loyal to the company will likely want it to be successful. You won't need to train them, and they can help you along the way if you're new to the industry.
In addition to a well-trained staff, existing employees can also provide key information about general business operations. Your experience working with the previous owner will provide insight into the positives and negatives of the business.
If you're not already an expert in the company's industry, buying an existing business is a great way to learn things.
Both the staff and the previous owner are excellent sources of information and knowledge, so it is best to keep an open line of communication when going through the process.
4. Established costumers
Together with the employees, you are acquiring an established customer base. Loyal customers and consumers will also want to see that your business continues to be successful - it is in their best interest.
These customers can help you improve your business, so be sure to research your past experiences to see how you can improve future ones.
5. Furniture and Equipment
In most businesses, the transaction includes real estate, as well as furniture and equipment.
If an agreement does not include these items or if you are starting a new business, expenses can add up quickly. The best way to ensure a smart investment is to consult an expert to help you through the buying process.
6. Prosperous Business
For new business owners, the first 18 months of ownership are the most critical. By purchasing an existing business, you are investing in one that is likely past this point by now.
The success of your business depends on multiple factors, but knowing that you are investing in a business that exceeds these odds is a huge advantage for any new business owner.
7. Entrepreneurial Freedom
Buying a business may not sound as exciting as starting yours from scratch, but you can implement all the creative ideas you have. Buying an existing business can be as challenging and rewarding as starting your own.
Be sure to do your research when considering investing in a business to discover your best options. Contact a Sunbelt Central America business advisor if you need guidance at any time during the process.
Source: Sunbelt Business Brokers