Are you thinking about owning your own business? Are you leaning towards buying an existing business or starting a new business? Many people think of starting a new business from the ground up. However, this has its disadvantages. You will need to develop a customer base, market the business, hire employees, and create cash flow. You will need to accomplish this without any reputation to rely on.
Buying an existing business may be the better solution. In this article we will explore some advantages of buying an existing business.
The Business Is A Proven Entity
An existing business is a proven entity. It has an established track record and a physical location with furniture and equipment in place. It has established vendors, suppliers, and a customer base.
Established Business Relationships
Existing relationships exist with customers, vendors and suppliers. Established businesses also have experienced employees who are valuable assets to the company. A buyer may already have established relationships with banks, insurance companies, advertisers, etc., but if not, the existing business owner does. These can be transferred to the buyer as part of the acquisition.
The Business Has A Track Record
There is a big risk in starting a business from scratch, no matter how much time and money you invest. An existing business has a financial track record along with established policies and procedures. A prospective buyer can see the financial history of an existing business. You can see when sales are high or low, what the expenses of the business are, and how much money the owner can make. In most cases a seller is willing to stay on for a period of time to help the new owner.
An Existing Business Comes With A Price and Terms
An existing business has everything in place. The business is in operation and typically has an established selling price. Opening a new business comes with a great degree of uncertainty. It can become a “money pit”. When purchasing an established business, a buyer knows what they are getting for their money. In some cases, a seller is also willing to take a reasonable down payment an then finance the balance of the purchase price.
EBIT will work with you to find an existing business and guide you through the buying process. We do the legwork for you. We will screen out unsuitable candidates and present you with a list of appealing alternatives to meet your goals.