Running your own business is an attractive prospect for many people – the idea of being your own boss, making a company your own and watching it expand is something many people want to enjoy. Whilst a start-up is one road on this path, there is another – buying an already-established business. But why would someone want to do that?
Having income from day one is a major advantage as it can take months for a new business to start generating profit. An established business means you don’t need to invest, so you can just take over and start working.
Having a steady income allows you to re-invest in the business and improve it as much as possible, however starting up would mean you’d have to put all your money into buying resources and getting the business up and running.
You can acquire instant customers from the previous employer and by getting to work straight away you can ensure the development of relationships. Marketing strategies can be used to gain a bigger customer base, but you don’t have to start from scratch. There are also many other assets that can be acquired from an existing business such as suppliers, employees and credibility. Potential employees are already in place, and this saves time and money looking for new employees. It also means you don’t have to spend time training new people.
As the business will have already been running, your main focus can be on the growth of the business, which allows you to concentrate on the parts of the business that need most attention, unlike a start up where entrepreneurs have to put all their energy into getting the business going, which can be time consuming and exhausting.
Providing the established business is doing well it can be less risk financially, but it can also be safer for the business owner. With an existing business you can look at previous financial records, however with a start up it is a jump into the unknown.
The initial cost of buying an established business may be more than starting up; however funding may be easier to access because of this. You must know what you can afford though, as there will be other costs included. When buying an established business it becomes easier to calculate your risk that eliminates potential failure of a start up business.