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Advantages Of Buying an Existing Business Over Starting a New One

Many people dream of owning their own business. If you are one of these people, there are several ways that you can become the owner of a successful business. One way is to buy an existing business. In fact, there are some advantages to buying an existing business rather than starting a business from nothing.

Startup Failure Rate

It is estimated that about half of all businesses fail during the first five years of operation. A lot of different factors play into this figure but an existing business that has already passed the five-year mark has a better chance of survival than a new startup. An existing small business for sale will have financial records that you can examine before making the decision whether to buy.

Name Recognition

One of the hardest parts of starting a successful business is the initial marketing needed to make potential customers aware of the business. Many business owners must spend a lot of time and money marketing their new business. However, an established business will already be known to many people and will have a customer base from which the new owner can build.

Access to Capital

It is often difficult, if not impossible, for a startup company to borrow the capital needed to expand or to survive through a rough period. However, just as you can look at the books of a business to determine whether to buy, a lender can look at the books and determine the credit worthiness of the business. You may find that you can have access to the needed money to expand a business when you buy an existing business.

Regardless of whether you are interested in starting a business or buying a business, it is a good idea to look at any available small business for sale. Looking at the available businesses can provide a lot of information on what works and what does not in the local market.