Want to start a business and couldn’t make choice whether to buy an existing one or start from scratch? Whatever you decide, there always will be number of risks and barriers. Yet, I’ll try to explain with reasons and arguments, why it’s always better to buy an existing, functioning business.If you ask businessmen, majority of them will advise to buy an existing business. The reason is that in this case, you will be able to make your dream come true more easily, in a short time and with fewer risks.
There’s no doubt that you can start a small business with small capital, but how long it takes to start operating, gain success and when will you start to make desired amount of output?! You have to consider that risk of failure is higher in new scratch, than in developing existing business.
Let’s discuss the case: you have enough resources for starting new scratch as well as for buying existing business. You have found out that business, you’d like to get involved in, is on sale. What would you do? Please, check out 8 reasons, why you should choose buying an existing one:
- Existing system: One of the main difficulties in starting new business is building a system that can lead the company to failure and this failure can be too expensive. Alike problems aren’t met when you buy a functional business. In this case, little development activities can be made that does not need many resources.
- Existing employees: Another difficulty, when starting a new scratch, is choosing employees, their training and time spent to make new employees make aware of every aspect of your business. These resources can be saved when buying existing business.
- Reputation: another advantage of continuing existing business is reputation. When you buy a functional business, you are sure that you already have consumers and you brand is already recognized by people.
- Facts VS. Theories: Buying an existing business, you already have FACTS like: annual revenue, annual net profit margin, statistics etc. as much fact you have, as less theory you need and less decisions are made based on forecasts and assumptions.
- Existing consumers: buying a business means buying consumers. This means that you do not have to dream for months when will at least one consumer appear.
- Better opportunities for raising funds from external sources: banks and financial institutions are more “friendly” to those businesses who already have at least two years of financial data, than to those who have just begun and there is no at least one annual statement.
- The owner’s experience: if you buy an existing business, you’ll also get the experience. Business seller is considered to be your future “teacher”. He guides the business specifics, what it needs, what you should pay more attention to and what less, etc. While, when you start a new business, you learn everything without help and make many mistakes.
- Less Risk: Due to the above reasons, the purchase of an existing business is less risky than starting a new one. So good luck in buying a functional business!!!