Benefits of Buying Rather Than Setting Up a Business
Thursday, July 02 2020
If you are wanting to establish a new business, you may be thinking of starting from scratch. That is fine if you have a great idea and know there is definitely a market for it and don’t mind a lot of the stressors that come with it. On the other hand, it may suit you better to buy a business. Especially if you have some money available to invest upfront.
If you are undecided, you may find that the following post will help you make up your mind. In it will we are going to discuss some of the main benefits of buying a business instead of setting up a completely new one.
Much Easier to Obtain the Necessary Finance
You will find that most financial companies and lenders will be more at ease about lending money to help you purchase a business that already has an established customer base instead of one that you are building from scratch and is therefore completely unknown.
It is a less risky option for them, as an existing business has a checkable performance history.
Earnings From The Very Beginning
With a start-up, as most owners will tell you, there is always a period where you initially don’t make any money or a relatively low amount, and it can last as long as three years or even more. In this period, you may find that you are spending money on business property, special equipment and the installation of it, as well as fittings, fixtures, materials and starter stock. There is a never-ending list of things you may need to spend on. This is why this stage can be especially difficult for new businesses unless you have either alternative income or finance.
With an already established business that makes money, you know you will get some income.
Established and Known Brand
When you buy a business, you are not just getting the business itself but it is an established and known brand and it has a track record. That also includes any associated websites, copyrights and trademarks. This helps to instil confidence in your various lenders, suppliers and customers that they would not necessarily have if you were just a start-up.
Instant Access to Customers
Following nicely from the above, it’s important to note that an established business comes with an established customer base. While you may need to use a selection of different marketing and sales strategies to increase the number of customers your business has, you will have an existing foundation to work from.
Instant Access to Full Contact Network
Starting a new business from scratch will involve a lot of energy, time and effort spent building a list of contacts. Networking is essential and it is important to have good, solid connections to marketing experts and suppliers. When you buy a business, you will normally get access to an instant collection of names and numbers which can help you to get things off the ground.
Furthermore, marketing companies, suppliers and lenders are more likely to give you better rates and deals if you are an established business rather than if you are a start-up.
Not as Risky
Just as we noted that there is less risk involved for lenders investing in a business that is already established, there is also less risk for you as the business owner. As long as the business is doing well, there is no real reason why it shouldn’t continue to do just that. However, a brand-new business is untested water and that means your financial security is not nearly as stable.