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Why buy an
established company rather than start from scratch? There are many
advantages for the
entrepreneur.
First of all, there is a savings in time, energy, and money when buying
an existing company. The lengthy process of researching and creating
business plans and models has already been done for you. Also, if there
is financing needed for your purchase, it is not as difficult to obtain
since a lenders are more likely to finance a business with a proven
track record.
Also, most times, everything is included in the purchase, especially in
turnkey or a franchise. It is very beneficial for you to inherit the
infrastructure that has already been established by the previous owner
(s). This not only includes the customers, but suppliers, employees,
equipment, and systems as well. It is a good possibility that the
previous owner (s) may offer some insight and assistance, therefore
making the transition easier.
In addition, the cash flow most likely will start immediately, rather
than in an unknown timeframe when starting a brand
new
business.
Profitability is not in question as it would be in a
startup.
An existing business is probably producing a decent income and also has
a solid client base established, therefore maximizing the chances of
success by the new owner (s). There are many types of businesses for
sale such as restaurants for sale, salons and retail establishments in
which you can get a good idea of how well the business is doing in part
by the traffic patterns. Speaking with the current owners as well as
customers can also help you give you insight into the well-being of the
business before you make your purchase.
Even though the business is already established, there is still room for
innovation and creativity. It is beneficial of course for you to
purchase a business in which you can bring something to the table as far
as experience and expertise, whether it is from your own job experience
or skills you've gained through a hobby. If you've never owned or
managed a business before, it is especially important that you at least
have some knowledge of the type of business that you are purchasing. For
example, if you've been a stylist in a beauty salon for many years, it
is likely that you will be successful taking over an established salon.
Finally, since the business already has a good foundation, you can focus
much of your efforts on building and expanding the business. As you
become more familiar with your customers' needs and wants, you will have
opportunities to add enhancements and improvements, therefore increasing
your chances of higher profitability much sooner than you would in a
startup
business. |
