Being able to establish your own business can be quite overwhelming and is definitely a rewarding sense of achievement for any entrepreneurs. However, while others want to achieve business success and establish their own brand themselves, many entrepreneurs prefer buying existing business and see it as a much practical form of getting into the business. There are pros and cons to both buying an established business and starting one from scratch, however, many people see more pros in buying seasoned business ventures.
Here are some reasons why buying an existing business may be better than starting one:
1.It is easier to borrow money for capital.
If you plan on lending money or applying loans for your business capital, it is most likely easier for you to borrow money from lenders if you want to purchase. Most lenders are more inclined to lend money for purchasing established businesses rather than for start-ups since there is less risk associated with it in terms of generated income. This assures them that loaned money will be able to get back to them.
- Security in cash flow.
For most start-ups, generating income can be a bit tricky and challenging. This actually normal for most start-up businesses to undergo such initial phase. During such period, it is possible that you may not even gain profit as much you wanted and expected to since you are still starting to introduce your business to the market. For some, it can even take them years before they can actually have an established brand in the market.
On the other hand, when you buy an existing business, the sale is already structured. While start-ups tend to “starve” at the beginning, buying an established business brand can help you skip such business experience.
3.Sure market and established network of contacts.
Since you are buying a recognizable brand with a track record and is an established business, customers, suppliers, lenders and other contacts are confident in your business and will, therefore, patronize your business as well.
4.Be a boss of trained employees.
It is quite difficult to build a team of trained employees however, these people are already included when you buy an existing business. With a trained team already in place, it is easier to implement strategies for business growth and development and focus on it rather than taking much focus on guiding your employees to function.
- Establish Consumer trust.
Consumer trust takes time and efforts to be established. With a business that has already built a business-customer relationship, gaining such relationship is much easier rather than in a start-up business.
Establishing your own business often comes with a lot of potential pitfalls as compared to when you buy an established business. Although it may cost you a large sum of capital to buy one, the probability of your newly bought business to thrive longer and generate income in no time is definitely higher than doing a start-up business.