There are budding entrepreneurs out there who are just looking for that first business to start, but they don’t know where to begin. It is possible to start a business on a shoestring budget, but buying a business can cost more money.
The other fears that come with buying a business include:
- Trying to execute a successful transition from the old owner to new ownership;
- Worrying that inefficiencies in the way the company does business could cause financial problems right from the start;
- The possibility that customers and vendors could abandon the business when they find out that the previous owner is no longer involved.
There are many logical reasons to fear buying an existing business, but there are just as many reasons to conquer those fears and move ahead with the purchase. In reality, buying a business could be the best investment you will ever make.
The Marketing Has Already Been Done
While it is possible to start a business on a shoestring budget, it can still take a significant investment in marketing to bring in real revenue. If you add up the marketing costs for a new business and the costs of getting that new business off the ground, you will see that there is not much of a cost savings for starting your own business.
With an existing business, the marketing has already been done. The previous owner has already done expensive and difficult marketing tasks such as:
- Establishing a customer base;
- Creating a brand name people recognize;
- Getting word of mouth advertising started among consumers.
With all of this critical marketing in place, buying an existing business can seem like a bargain. All you need to do is keep the marketing going and then start implementing your own ideas.
Start-Up Mistakes Have Already Been Made
When you buy an existing business, you are buying a company that has already gone through the expensive trial and error stage that all start-ups go through.
If you want to be an entrepreneur but you are not confident in your ability to get a business off the ground, then the logical solution is to buy a business that is already off the ground and avoid the costly mistakes new entrepreneurs make.
Easier To Get Investors
An established business already has a track record and a business plan that investors can look at when they are considering whether or not to invest money in a company.
With a start-up, you are trying to convince investors to put money into your idea and base their decision on the possibility that you can make your idea work.
With an existing business, you know it already works because there is a history. You need to come up with a business plan that will use this successful company as a foundation and expand from there. It is much easier to get investors interested in your company when you already have a successful track record to use in your investor pitch.
Buy an Established Business
Building a business from the ground up can be difficult work, even for people with the proper educational background and experience. Buying an existing business can be an excellent way to get into the business world and learn how it is done while lowering your exposure to risk.
There is always going to be risk in any business venture, but buying an existing business as your first entrepreneurial endeavor can help you to learn how to run a business and be successful without having to go through many of the initial trials and tribulations that come with a start-up.
Anyone with an entrepreneurial spirit should put aside their fears of owning an existing business and make plans to give it a try.
With a customer base already in place and the business process figured out for you, buying an existing business is one of the best ways to introduce yourself to the world of being a business owner.