ADVANTAGE OF BUYING A BUSINESS
There are many advantages of buying a business. Read below to find out why it makes sense to buy a running business, instead of starting from zero.
WHY ARE BUSINESSES SOLD?
- Proven Concept – Buying an established business is less risky – as a buyer you already know the process or concept works.
- Brand – You’re buying a brand name. The on-going benefits of any marketing or networking the prior owner has done will transfer to you.
- Relationships – With the purchase of an existing business, you will also be buying an existing customer base and vendor base that took years to build.
- Focus – When you buy a business, you can start working immediately and focus on improving and growing the business immediately
- People – In an acquisition, one of the most valuable and important assets you’re buying is the people. It took the seller time to find those employees, develop them and assimilate them into the company culture.
- Cash Flow – Typically, a sale is structured so you can cover the debt service, take a reasonable salary, and have some left over to take the business to the next level.
- Investment Visa – An existing business is great for non-residents to establish their work visas and residency in the USA. Learn More
- The first thing you should consider when buying a business is “Why is the business being sold?” There could be positive reasons or negative reasons for wanting to sell. In both scenarios, you can benefit by buying the business. Here are some reasons:
- Burn out – Owners just no longer enjoy the business and want to move on to something else.
- New Opportunities – New and better opportunities available to the owner.
- Declining Revenues – Revenues declined for whatever reason. Maybe a new owner can repair business and increase sales.
- Negative Business Changes – Businesses decline for reasons beyond the owner’s control, such as economic downturn or a high jobless rate.
- Partner Disputes – Divorce or dissolution of partnership. This can sometimes present a good opportunity for a buyer if the partners are in a hurry to sell the business.
- Financial Reasons – Even when an owner has a profitable business, they can sometimes make bad decisions which lead to financial difficulties. This could be an opportunity for a buyer.