Many people would rank being their own boss at the top of their life goals list. The idea of having greater control over one’s own day-to-day life, making their own rules, and charting their own financial destiny has great appeal. It’s no shock that people dream of owning their own business. Our PA, NY, ME, VT, RI, NJ and CT business brokers receive many calls from people with that very goal.
With that stated, however, it is also true that there are substantial differences between starting one’s own business and buying a business that has already stood the test of time. Let’s look at 3 of the top reasons that people often opt to buy a business instead of starting their own.
#1- Acquire an Established Brand
It can take many years, and a sizeable investment, to build up and establish a brand name. There are many businesses competing for exposure, visibility, and, of course, dollars. Buying an established business effectively bypasses the considerable investment in time, money, and effort needed to build a brand name. With all the competition out there, it can be very difficult to stand out from the crowd.
An established brand provides both instant recognition and credibility. Additionally, busying with a preexisting business you also have an instant customer base and instant cash flow. It can take a new business many years to build up these essentials. If you’re looking to get an idea of what businesses are out there, a great place to start is with one of Inbar Group’s Philadelphia business brokers, or our brokers in other cities including New York City, Providence, Hackensack, Augusta, Wayne, and Pittsburgh. We also have Greenwich, CT business brokers and those representing clients in Fairfield and New Haven.
Most people who start a business or buy a business need financing. Lenders and investors will be far more receptive when it comes to the purchase of an existing business than backing an unproven business looking to enter the marketplace.
Lenders and investors typically look at such key variables as cash flow and existing customer base before allocating funds. Opting to buy an existing business over starting a new business provides prospective business owners with a sizable edge in this regard.
#3- Business Operations on Day One
There are many variables that go into operating a business. Whether it is having an accounting system in place, a good customer service process, reliable suppliers, a system for how to manage inventory or day-to-day operators, or a range of other factors, buying a business provides proven business operations systems on day one. Buying a business can save a simply tremendous amount of money and hassle.
The idea of building a business with your own creativity, ingenuity, grit and determination most definitely has its appeal. However, it is important to remember that starting a business also means you will be dealing with a time-consuming and expensive period of trial and error. Considering the fact that most businesses fail within a few years of their founding, it is only prudent and advisable to take a good serious look at the substantial benefits providing by buying a business.
Buying an established business means customers from day one, relationships with suppliers, brand recognition, and more. Entrepreneurs should consider all their options, and that includes buying an existing business. Feel free to click here to reach out to our PA, NY, ME, VT, RI, NJ and CT business brokers with any questions you may have.