6 Benefits Of Buying An Existing Business
Suppose you want to get into business for yourself. Should you buy an existing business or start a new one? There is no right answer for everyone. Just look at the famous Elmer Winter and Clement Stone; they filled needs that nobody was filling. S. B. Fuller couldn’t have bought any company because he had only $25 when he started his cosmetics company.
On the other hand, famous names such as Hilton, Simon, Perot, and Fairchild did better by buying small ongoing businesses than they could have done by trying to start their own. Most small owners would probably say the same: “Buy if you can. It’s quicker and safer than creating.” Of course, you can always start a tiny business on a shoestring. But then you may toil a long time before you make it big enough to pay you as much as you might earn by the same effort elsewhere. And the risk of failure is much higher in starting a new enterprise than in buying one that’s already on track.
Let’s take a look at six advantages that purchasing an existing business may have and let’s assume that you have enough capital to either start a business or buy one – and that the kind of business you want is for sale. Here are viable reasons why you’d probably be smart to buy it:
1. You may possibly get it for a bargain price. Circumstances sometimes force an owner to accept less than his business is worth in order to sell it quickly. Health, personal, and domestic problems are such examples.
2. You bypass start-up problems, which can be unforeseen and costly. You save the time and trouble of buying equipment and supplies. Operating methods are proven. Customers are already buying from the company.
3. Guesswork is minimized. If you start a new enterprise you can’t be sure about the right location for it, right-size building, right forms of advertising, right prices, and so on. An established owner already knows most of the answers.
4. The owner can give you valuable information about competition, demand, seasonal fluctuations, community attitudes, and other variables.
5. You get a time-tested list of suppliers and service people. This benefit alone can save you months or even years of sifting through bad choices of companies to do business with.
6. Often you inherit trained employees who will stay on and help you learn the business. This is perhaps one of the most beneficial of buying an existing business.