If you are dreaming of being a business owner, you have two options: start your own business from the ground up or buy an existing one. While starting your own business can be exciting, it can also be risky and time-consuming. However, buying an existing business does offer several advantages.
Advantages of Buying an Existing Business
Established Customer Base
Buying an existing business will already eliminate one major hurdle associated with starting a business. It will already have an existing customer base. Whether that is B2C or B2B, a successful business with a strong track record has established that already. This is clearly an advantage from a risk standpoint and in terms of saving valuable time and money on marketing and advertising efforts.
Proven Business Model
Another benefit to an existing business is that it will have a track record of success already established. There will be a history of demand for their product or service. This can give you confidence that the business is profitable and sustainable.
Trained Employees
Another benefit to consider with an existing business is that it likely includes employees who are already trained and experienced. This can save you time and make daily operations and the transition easier. The idea is for your customers to feel like the sale was seamless.
What to Consider Before Buying an Existing Business
Do Your Due Diligence
Before making a purchase, be sure to thoroughly research the business, including the financials, legal history, and reputation in the market. This will help you get a good idea of what you will be buying into before even making an offer. It’s usually a good idea to enlist the help of a good small business accountant and/or attorney.
Understand the Reasons for the Sale
Is it retirement? Or to pursue other opportunities? There are lots of legitimate reasons to sell a business. Just because a business is for sale does not mean there is something wrong with the business. Just like you may want to embark on a new chapter by buying a business, the owner may want to move on as well. There is a life cycle to business ownership. Often buyers are looking for something that does not exist. They may not understand why someone would sell a successful business. The fact is there are many great businesses for sale with nothing wrong. It’s just time for a new owner, a new vision and energy.
Seek Professional Advice
And of course, it is always wise when contemplating buying a business to consult with a professional. Beyond the accountant and the attorney that we mentioned earlier, Transworld Business Advisors can offer you expert advice and guide you through the entire process. We also offer all types of businesses for sale from big to small. Starting your search and journey to business ownership with Transworld is always a good idea!