What are the Advantages to Purchasing An Existing Business instead of a Start-up Enterprise?
August 30th, 2009 by Bruce

- Image by Chrissy Johnson1 via Flickr
There are quite a few advantages to purchasing a business that currently exists over owning a business that you have to start from “square one”. Here is a look at some things to consider when debating whether to buy a business over a start-up enterprise.
FINANCING. A purchase business proposal is looked upon more favorably by banks than a start-up because of existing business valuation data. As such, you’re far more likely to acquire financing if you’re looking to own a business.
TRACK RECORD. A business for sale has been up-and-running for a period of time. With a buy business opportunity, you have detailed information on its previous performance, the market fluctuations, current competition and its long term expansion potential. You can buy business as is and incorporate your ideas. As you already have a fairly good idea of the value a business retains, you can work on its weaknesses and make the most from its strengths.
SOLID ASSETS. When you value a business, assets are a key component. With buying a business, you are acquiring key assets that enable you to conduct business as usual. As a buy business turnkey operation, you don’t lose time or money setting up a business. When purchasing a business, inventory is readily available and the business currently has the necessary employees and regular customers.
APPEAL. With a business for sale, you can choose one that appeals to your interests. Even though you buy a business already in existence, it can still be viewed upon as a startup because you are bringing your vision to the existing structure.
OPTIONS. Buy business options range from small family-run operations to large companies. You can also purchase business franchises. Regardless of which buy business route you choose, performing a thorough business valuation is absolutely essential. When you value a business, you can be assured that the price you are paying to own a business is fair.
VALUE. A business for sale brings a wealth of value. The buy business portfolio includes everything you need to continue on seamlessly with the business. The business valuation is an important step to ensuring you are getting a profitable enterprise. When you value a business, other factors beyond it being financially sound need to be taken into consideration, including tangibles and intangibles included in the sale. When you buy a business, you also need to decide if it’s a stock or asset purchase. All of these issues should be covered in the business valuation phase.
Unlike a start-up, when you buy a business, you are free from dealing with finding the best location, the costs of equipment and supplies, setting up vendors or suppliers, acquiring licenses and permits, hiring employees, establishing brand recognition, identifying industry competition, and the costs of marketing and promotions. But if you’ve always wanted to start a business yourself and experience all the nuances that go along with it, then buying a business might not be for you. If you prefer not to inherit someone else’s creation and own a business that you create yourself, then a start-up probably best fits your entrepreneurial personality. However, if you’ve always wanted to run a business, then a business for sale is your best option.
Richard Parker is the President and founder of the Diomo Corporation – The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream of buying a business.
- No Comments »
- Posted in Business Marketing










