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.
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.