Building your own business is hard work.
That’s why many entrepreneurs choose to Buy an Existing Business rather than starting from scratch.
- What should you look for?
- What should you avoid?
Even Business Mogul Donald Trump says you should buy an existing business instead of starting one.
The advantages of buying an existing business instead of starting one are numerous with the most obvious one being it saves you time.
- Suppose you want to start a retail business. It may take months for you to build an adequate inventory.
- Opening your own restaurant means creating your own recipes and menus;
- Building a manufacturing business from scratch can take years.
When you Buy an Existing Business, the “dirty work” has already been done for you.
If the business you want to buy offers a product or a service, you can evaluate the operating history and better understand the demonstrated market.
- Are people buying the product or service?
- What are they willing to pay?
- What type of advertising has been most effective?
- When you start your own business, it can take many years of trial and error to establish your market.
Buying an existing business can alleviate this process.
Buying an existing business will allow you to evaluate its cash flow and operating expenses, giving you a better idea of how much investment capital you will need. When you start your own business, these numbers are much more difficult to estimate, and investors consider start-up businesses higher risk than existing ones with operating histories and proven track-records.
Perhaps the biggest advantage to buying over starting a business is the existing business’s potential. You may see growth opportunities the current owner doesn’t, or maybe you have a superior business plan.
Your enthusiasm and excitement for the business can revive it and help it to grow, and often relatively minor changes in advertising, personnel, or procedure can greatly improve profitability.