Do you want to start a business but don’t want to start from scratch? Buying an existing business can help you hit the ground running. There are plenty of businesses for sale out right now.
The biggest advantage of buying a business is that most of them are already established in the market with customers and are retaining a solid profit.
Buying the perfect business starts with choosing the right type of business for you.
Other advantages of buying an existing business:
When the location of the business is critical to its success, purchasing a business that is already in the right location may be the best choice. It can be an existing business’s greatest asset. The location of an existing business can provide significant competitive advantage when compared to opening a second class location and hoping to draw customers.
Employees and suppliers in place
Buyers may be able to attain some of the experienced employees if they choose to stay on and can act as a significant resource. They can also reap the benefit of choosing if they want to stay with the old supplier of the company or a new one
Purchasing an existing business saves the time and energy required to plan and launch a new business.
Installed equipment with known production capacity
In many cases the buyer can purchase the existing physical facilities and equipment at prices that are significantly below their replacement costs.
Easier access to financing
Investors and bankers often perceive the risk associated with buying an existing business with a solid history or performance to be lower than that of an unknown star-up. This may make it easier for the new owner to secure financing.
Established trade credit
Previous owners have already established trade credit relationships of which the buyer can take advantage of. The business’s proven track record will give the new owner leverage in negotiating favorable trade credit terms as the supplier may not want to lose a good customer.