Buying An Existing Business vs Starting A New Business

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Whether you are looking to buy a business or sell your business, it is a good idea to know the benefits of buying an established business. As a buyer, you will certainly want to understand why buying an existing business is often preferable to starting a new one. As a seller, you can use the benefits that an existing business has to offer to maximize the sale of your business.

Benefit #1

One big benefit of buying an established business is that it has an established concept that has a proven track record of success. If you were to start a new business from scratch, you would be starting with a new concept and the variables that go into which have not been proven to work. You are faced with more stressors and a greater probability of failure.

Benefit #2

Another big benefit of buying an established business is that it has a proven cash flow that is well-documented. You can see how much money the business is generating and how the money is flowing in and out of the business. You will know how your expenses, both business and personal, will be paid. When starting a business from scratch, how much money it will generate and if it will be enough to cover expenses are a lot more clouded in unknowns.

Benefit #3

A third big benefit of buying an established business is that you will have an established staff. A business is only as good as the employees who help make it what it is. An established staff implies loyalty, experience, and chemistry. These qualities create smooth day-to-day operations. For the owner, this translates to less headaches and greater profitability.

Benefit #4

The fourth big benefit of buying an established business is that it has established relationships. An established business will have reliable and consistent supply chains. With a new business, supply chain issues can mean the end before the business has a chance to establish itself. An already established business will also

have a loyal following of customers who know who they are, where they are, and how to buy from them. A new business will have to first build their recognition.

Buying a business has big benefits. These benefits and advantages should be considered when deciding between buying an established business or starting a new one from scratch.

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