Four Reasons Buying an Existing Business Beats Starting from Scratch

Owning a successful business is a top goal for millions of enterprising Americans. So what’s the best way to make that goal happen? For many, starting a new business comes to mind first. But startups can be extremely difficult and expensive, and there’s no guarantee that your business concept will work.

Often, the easier, less risky approach is to purchase an existing business with a proven track record and all operations and relationships already in place. Here’s why:

1. Less risk: Purchasing an established and already profitable business means that you’re taking advantage of a proven concept. The guesswork involved in determining whether a whole new idea or concept will work is eliminated, and so is the financial gamble that invariably comes with a startup venture. Of course, businesses change over time and there’s always room for improvement. But some of the toughest work already has been done. 
2. Cash flow: Arguably, the toughest part of starting a business anew is securing startup funds. But landing that initial cash doesn’t mean that the rest is easy. Depending upon the type of business and other factors, including the economy, market demand, location, etc., turning a profit for the first time can take up to three years. With the right deal, however, a savvy entrepreneur can take over the debt services of an existing business, draw a reasonable salary and have funds left over to take that business to the next level. 
3. Brand: A business’s most valuable asset is a strong, recognizable and respected brand – something that takes time to develop and successfully implement. But when you purchase a business, its brand already is in place, and so are all the ongoing benefits that come with it. If your brand has been effectively marketed, your local community and target market already knows about your business, and that’s 90 percent of your business battle. 
4. People: A business is nothing without people, including staff, vendors and customers. When purchasing a well-run existing business, you’ll get the benefit of all of those relationships that the company’s founders took years to build. Of course, it will take time and work to develop good will between you and those existing employees, vendors and customers. Some may be upset to see a familiar face go. But you’ve also got a perfect opportunity to talk with each person, learn what is and isn’t working with the business and make the necessary changes and improvements.

These are just a few of the benefits of buying an existing business over building a startup. If you’re convinced that purchasing a business is the best option for your entrepreneurial goals, Gateway -Business Brokers can help. Call 904-372-9157 and schedule an appointment today.