The traditional view of opening a small business envisions the owner drafting it from the ground up, meticulously creating and installing each level of the enterprise until it resembles the initial concept. While this vision is tantalizingly straightforward, the alternative of buying an existing business is worth considering. Below is a list of reasons why:
Guaranteed Customer Base
Successful businesses eventually earn the loyalty of clients and customers that come to rely on the existence of the business to serve their needs. This support is crucial to any endeavor, as it allows for feedback and insight to your business that you could not receive from anywhere else. Additionally, existing customers are more likely to ride out the ‘growing pains’ of startup.
As many will tell you, the first year and a half of a new enterprise is crucial to its future character and survival. Purchasing an existing business, which is likely to have made it past this point, will enable you to avoid this unstable time and provide a little room to breathe.
When purchasing an existing business, you will generally acquire all of its assets. Depending on the nature of the business, this will generally include equipment, real estate, and furnishings. These items, if you were starting the business fresh, can quickly add up and overwhelm your starting capital.
Upon purchasing an existing business, you will inherit more than buildings, vehicles and sundry equipment. You will gain access to the most valuable asset of any business: the employee base. Current employees can provide insight to the inner workings of your business and allow you to learn top to bottom. Additionally, loyal employees are committed to the success of your business and will serve as valuable allies.
Purchasing an existing business is considered low-risk by most lending institutions. The requirements for approval on a loan are significantly less stringent on these types of purchases, as the business already has an existing track record that can be analyzed by the lender. Calculations on anticipated expenses and earnings are much more reliable as well, creating a more stable enterprise all around.
Assuming you are not already an expert in the field of the business you are acquiring, purchasing an existing business is a great way to improve your knowledge of the industry. Owning and operating a firm directly engaged in the business will provide you with invaluable experience that you cannot learn any other way.
One of the most attractive aspects of owning your own business is the freedom that it brings. The ability to experiment with new processes, techniques or approaches is an incredibly enticing prospect. On initial glance, it would seem as though purchasing an existing business would rob you of that freedom, but nothing could be farther from the truth. Many creative dreams wither and stagnate in the early opening stages of a new business as they are occluded by startup concerns and expenses. Purchasing an existing enterprise eliminates many of those early headaches, granting you the freedom to explore and innovate.
Hallmark Business Brokers, Inc. is a broker dedicated to helping you through the process of buying and selling your business. Our dedicated staff has the expertise to navigate all stages of the process and our extended network of attorneys, accountants and bankers allow us to leverage the resources necessary to make your business a success. We encourage you to contact us at 941-445-4726 for a no-cost confidential interview. We look forward to working with you.