If you’ve dreamed of starting life as an entrepreneur then you’ve likely conjured images of the startup in your garage, endless hours and scrounging for capital while you work as hard as you can to get your business idea off the ground. While many a Fortune 500 company began this way, it isn’t the only path to entrepreneurship.
What’s another path? Buying an existing business.
Wait, people sell businesses? Yes, existing businesses are bought and sold every day. Sometimes it’s because an owner has reached retirement. Maybe they’ve decided to undertake a different venture. Perhaps there’s something in their life that has created a situation where they can no longer own and operate their business the way they’d like to.
In other cases a seller has reached a particular metric – maybe they bought a smaller business that needed new growth strategies and now the business is at the point where they’re ready to sell and start again with a new project.
Whatever the reason for the sale, there are great businesses on the market every day – businesses that would meet the goals you have for business ownership.
But I have a couple of my own business ideas, why should I consider buying an existing business instead? There are many benefits to buying an existing business that just don’t exist if you’re starting on your own.
What are the pros?
A proven concept. While you might have a great idea, it’s just that – an idea. It hasn’t been proven. This is why the failure rate of startup businesses is so high – sometimes a great idea just falls flat when it’s introduced to the world. With an existing business someone else has laid the groundwork for you. The fact that the business exists today means the concept works.
An existing customer base. Customers are the obvious life blood of a business, and with an existing business you will still have new customer acquisition as a priority – but you don’t have to start from square one. A loyal and established customer base exists the day you take over.
Better financing opportunities. Traditional lending institutions are very gun-shy about supporting start-ups. You’ll likely have a hard time getting funding. When you buy an existing business there tend to be better options for financing your purchase, like the Small Business Administration (SBA) or seller financing.
Immediate cash flow. When you start out on your own you end up spending a ton of money before you ever generate any kind of cash flow. When you buy an existing, operating business the cash flow is there the day you get the keys.
The message here is business ownership and an entrepreneurial life don’t have to start in your garage. You can buy an existing business and reap the benefits of someone else laying the groundwork for you.
Have you always wanted to start your own business but the idea seems too daunting? Would you like to know what businesses currently for sale could meet your goals for business ownership? Ask us, or search current business listings here! Leave any questions or comments and we would be happy to help.