Why buying a business is better than starting a business

| 4 min read

While purchasing an existing company will often come with a higher cost upfront than creating a new one, it’s hard to deny that there are many benefits that can be enjoyed from buying an established business. So much so in fact, that most entrepreneurs are opting to search the market for a business that can essentially give them a head start.

To help give you a better idea of whether or not this is the right path for you, here are a few of the advantages that can come with these kinds of transactions.

These types of businesses are in a good position

One of the main benefits is the fact that you’ll be purchasing an enterprise that has had all of the hard work put in already, so there will be no effort required to start it up or the hassle of creating a new brand from scratch in the hope that it takes off.

As long as there’s financial history to the firm, there are people paying money – and with proper leadership and effort, this should continue long after you’ve made the trade. This is one of the key reasons why so many entrepreneurs look to buy an existing business rather than starting from the ground up. Creating a brand and getting to a point where you have consistent cash flow isn’t always the easiest task, so giving yourself the chance to skip that part of the process can be very worthwhile indeed.

You’ll have a customer base from the start

Regardless of the type of establishment you’re looking to buy, there will be a network of contacts, clients/consumers who are familiar with the organization. As a result, there will be more ready and waiting for you too, which generally makes the whole process far simpler, as well as giving you the chance to be more confident with your decisions.

You’re likely to keep the company’s staff

Just because the previous owner wanted to step down and give the firm to someone else doesn’t mean that the employees will want to do the same – in fact, the majority of them will want to keep their jobs. Often, this can ensure that you’ll have a team in place ready for when you step in, most of which will have more experience with the business than you do, which could come in handy later on.

Getting financial support will be easier

In most cases, having good foundation in place means that the company you purchase is likely to keep on growing, especially if you put in the time and work to increase its potential. Banks and lenders tend to be far more willing to work with a company when they can see years of operation and its ability to improve – both of which are attributes that a stable brand will generally have, often making it easier to get a loan.

Pros and cons of creating a business yourself

Starting your own firm isn’t an easy task at all, which is a key reason why more individuals are looking to purchase an established one.

Often, the hardest demands come in the earlier years, which is when you’re likely to be struggling the most – a large barrier that convinces many people to give up. Even with all of this, there’s also the fact that lenders tend to be far less willing to offer loans, even to those who are able to fund a large portion of the costs needed themselves (although they may be in a better position to get some extra financial help).

It does however give you plenty of creative freedom and the opportunity to see a company rise from the ground-up, with the satisfaction of knowing that it’s your hard work and dedication that brought you this success.

A quick tip: it’s important to do some research on the market that you’re working in, and ultimately, making the right decisions throughout your journey. Each step you make can be vital to the end result – and one wrong move could set you back greatly.

Is it worth buying a business?

In a nutshell, you can skip the majority of the difficult parts of the process of starting up a firm by purchasing a company that’s established (since someone has technically done all the work for you), but ultimately, the choice is yours. Some prefer the idea of beginning from scratch where others may be more keen on the idea of taking advantage of an already set-up organization – it all comes down to personal preference.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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