Top 7 Reasons to Buy an Existing Business

In times of financial uncertainty, any kinds of investments

ought to be scrutinized in order to make a calculated,

informed decision. And as far as starting a new business

versus buying an established business, financial experts are

weighing in favor of the latter, mainly due to the reason

that it has a proven track record. Start up business can be

daunting and unnerving venture but when you buy an

existing business, you are inheriting all the benefits from

previous owners. There are distinct benefits of buying a

business which is already up and running. Here are few:

1. No Start Up Time:

It takes from one to three years to get a business up and

rolling, and often longer to reach profitable revenue. Those

crucial years and dollars might be put to good use building

from the profitable base of an existing business.

2. Proven Track Record

An existing business has the trail of paperwork or record at

your disposal. Checking the paperwork allows you to rest

assured that your money was invested in the right place

and that it will generate a steady profit from day one. This

will help you determine whether or not many or all of the

points featured above stand true for the business you’re

considering to take over. If it doesn’t meet most or all,

keep searching – this is not a game of luck, it’s a game of

persistence.

3. An Existing Customer Base

The second thing to keep an eye out for is the contacts the

business you’re looking to buy has made over the course of

its existence. These contacts can not only generate profits

and sales themselves, but may also refer your products

and services to other potential clients or businesses.

4. Brand Recognition

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. So, now you

do not have to build the brand from scratch, which might

save you time, and most importantly – money.

5. Building on Strategy

Once you take over a business which is already running,

you will probably end up starting to focus on building your

own strategy and vision, and incorporating it into the

business model you’re already running. Odds are the last

owner did something wrong, considering he was eager to

sell it, so focus on what needs to be fixed right away and

then start figuring out new ways to expand. This is a treat

which a new business won’t offer, as you’ll need to put all

your resources and efforts into growing it.

6. Attract Investors

A business with a solid customer base, great products and

services which sell, along with an established brand, has a

much higher chance of attracting outside investors. As

your own ROI is pretty much guaranteed, so is that of a

potential investor who might see an opportunity and take

it once he notices management has changed and the

business is once again on the right track. This brings us

back to our previous point which underlines why it’s

important to focus on fixing what’s wrong before building

upon an existing strategy.

7. Reinvestment Opportunity

Given that the business you purchase is already making

you a steady profit, you can consider reinvesting that profit

into your company. Whether that’s in regards to

developing new products or services, or expanding and

improving upon old ones is up to you. But it’s one benefit

often overlooked by people considering buying an existing

business.

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