8 Good Reasons to Buy an Existing Business
If you’re looking to start a business, you may have heard it’s best to start from scratch. But what if you want a company with higher chances of success? There’s another option for you—buying an existing business.
“Buying an established company means you don’t have to worry about building the foundation—you just need to focus on improving what’s already working for your new business,” says business and finance analyst Ashley Hansen from Online Business.
When you think about buying an existing business, there are many things to consider. So here are great reasons why you should acquire an existing business:
1. Skip Working from the Ground Up
Starting your own business involves a lot of work. You need to set up shop, hire employees, and find clients. That takes tons of effort and resources.
If you decide to buy an existing business instead, the location, equipment, hiring of employees, and business reputation already exist for you to capitalise on.
2. Existing Customer Goodwill
If you acquire a business, you’re buying more than just the building and equipment—you’re also purchasing the company’s reputation.
As an established business with long-term customers, you can expect existing patrons rather than starting from scratch with no customers or clients.
3. Solutions to Problems are Drawn Up
When you start your own business, you have no idea what roadblocks or setbacks you might face. It could be anything from equipment problems to personnel issues to financial concerns.
In contrast, if you’re buying an existing business, all potential obstacles have been faced by the previous owner. You will have access to their records and systems, so you can get started immediately without worrying about delays or unexpected expenses.
4. Easier Finance Options
Another advantage of buying an existing business is the options for financing are vastly easier and better. If you’re buying a company, you can use its assets as collateral to secure a loan.
And if you purchased a business with existing relationships with banks and government agencies (if applicable), getting the necessary financing is smoother than starting, in contrast with startups with no history of dealing with these institutions.
5. Logistics Plans are Laid Out
When you buy an existing business, you’re not just getting the company’s name and location. You’re also getting all the contracts and agreements made with vendors, contractors, and suppliers.
6. Get Immediate Earnings
Buying an existing business gets you immediate cash flow. You don’t have to go through the months or years of development needed for a new company to hit its stride and start generating revenue. Plus, you get all the cash flow from operations and already-in-place payrolls.
7. Access to Well-Trained Staff
When you purchase a company, you inherit all the staff—which can save time rather than hiring new employees.
If you’re new to business ownership, your employees have likely worked for years for the previous owner. That means they know everything about how the company operates, from how to do their job efficiently and effectively.
8. Higher Chances of Success
Because startups tend to experience more failure in the first year of their operation, buying a successful existing business can help lower your risk and make it easier to start.
If the previous owner already figured out what works and what doesn’t, then you can use those lessons as a roadmap for your success.
Start Capitalising on Built Foundations
Purchasing an established business will enable you to take advantage of a lot of hard work that’s already been done. The business foundation is laid out, and you can continue building on its success.
Summit Business Brokers is committed to helping you buy and sell your business for maximum profits!
Contact Andrew today at 0418 676 400 to find out how he can help.