More than 5 million people took the leap and entered the world of entrepreneurship in 2021.
It’s a great time to start a business and it’s a very rewarding path. What many don’t realize is how much work it takes to start a business from the ground up.
Buying a business can make the path a little shorter. If you’ve never considered buying a business, we’ve got some news for you.
There are a number of benefits to entering business ownership through buying a business instead of creating one.
Keep reading to learn what they are.
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1. Validated Business Model
Business owners usually take an idea and run with it. They don’t test the concept or validate it. If the concept fails, they end up closing the business.
You can skip this step when you buy an existing business. The concept is already validated and you have a proven business model.
2. Established Customers
Getting customers to try a new business is a tough challenge. An existing business already has a customer base.
You can build on the customer base and grow the business faster than starting from scratch.
3. Built-In Brand Awareness
The biggest expense for a new business isn’t office space. It’s marketing.
Starting a business from the ground up means that you have to invest a lot of money into building a brand. That’s how people will know about your business and make a purchase.
You don’t have to invest as much into marketing because people are already familiar with the business.
If you do buy a business, do your research. Make sure the business has a good brand reputation before you make an offer.
4. More Financing Options
The financial industry is wary of lending money to new businesses. Lenders will ask for your personal credit to approve a loan.
They’ll also ask you to make personal guarantees. That means personal property like your home and vehicle are at risk.
If you buy an existing business, you’re buying an asset with an existing track record. Plus, sellers may offer to finance the purchase of the business.
5. Existing Supply Chain Vendors
Every business depends on having the items customers want when customers want them. In other words, you depend on vendors and partners all through the supply chain to do their part.
When you start a business, you have to vet and select vendors for your business. This is a long and tedious process.
Purchase an existing business, and you have a built-in supply chain. Of course, you can decide to use different vendors or stick with the ones you have.
Your customers won’t experience any disruptions during the business transition.
The Benefits of Buying a Business
It’s a great time to become a small business owner. However, the path to entrepreneurial success is long and challenging.
Buying a business is a smart management move because you can lower your startup costs. You can take an existing business and make it your own.
For more great startup tips, check out the other articles on the blog today!