If you are thinking about running your own business, you may be asking yourself: should I start a new business or buy an established business. In this article we will take a look at buying a business versus starting a new one.
An Established Concept
An existing business will have an established concept. Starting a business from scratch means taking a big risk in the form of a new idea. Will your idea work? If the business fails, why did it fail? You will need to ask these questions when you buy. An established business has already shown that the concept and the variables that go into it do work.
Proven Cash Flow
An existing business has a proven cash flow. You can look at the books and determine how much money is flowing in and out. You will not know how much money a new business will generate. This can make it difficult to figure out how to pay your business expenses, as well as your personal ones.
The Unproven Element
No matter how good your idea and/or location, a new business is still unproven. There may be an unforeseen variable that you or your consultants may have missed. When you opt for an existing business, this variable does not apply.
An Established Staff
A business is often as good as the people that support it. When you start your own business, you have to go out and find all your own employees. This process is much more than sifting through resumes. A resume only reveals so much. A resume doesn’t factor in chemistry or reveal if a candidate will be a good fit for the business.
An established business comes with an array of business relationships. Working out problems with your supply chain in the early days of your business can mean the end of that business. An existing business can point the way to reliable and consistent suppliers.
When buying an existing business, you are acquiring a proven performer. Buying an established business allows you the benefits that come with an established brand name and location. EBIT Associates can help you find a business that meets your wants and needs.