Anyone considering owning a business, unless it is inherited, works through this question, “Should I buy or start a business?” I am thankful that I have experienced both situations in my career.
The benefits of buying an existing business outweigh a new start-up IF you follow the guidelines for buying an existing business.
There are no right and wrong answers, but there are some important points to consider. Buying an existing business will generally be a safer bet in regard to being able to predict the future. You will be buying an existing customer base, and you don’t have to reinvent the wheel. Banks, and other financial institutions will be more willing to provide funding for your investment since there is a proven financial track record.
In almost every circumstance, buying an existing business means the previous owner will help you in a negotiated transition period as part of the purchase price.
There’s a chance you will also be inheriting a team who can help you understand the opportunities and challenges in the business, and if you incentivize them well, they can be a large part of your future success. An established business provides a base of customers/clients. It provides existing relationships with vendors that already know your product, operational processes and purchase history. And you start out on day one with a recognized business name, phone number and other intangible assets.
Confidential Business Intermediaries has a proven process that has worked for over 25 years very successfully. We understand the questions and knowledge that must be gained before a Buyer buys a business. If you are simply thinking about business ownership, give us a call and we will be happy to sit down and share our Business Buyer Discovery Process regarding which direction might be best for you. Contact firstname.lastname@example.org for more information