Top Ten Reasons Why You Might Want
To Buy an Already-Operational Business

Going into business for yourself is difficult and very challenging. How you go into business might make or break your chances for
success. You have several important and proven options as to how you get into the ownership and operation of your own business:

1. Buy a business franchise in which you establish your new business using the proven business concepts of the franchisor.

2. Buy a business distributorship in which you create your own new distributorship business utilizing the proven business concepts of the distributor company.

3. Start a business from scratch by relying on your own business model, as contrasted to utilizing a franchise or distributorship.

4. Buy an already operational business, whether that business is a franchise, distributorship, or independent, made from scratch business concept.

What this article concentrates on is the fourth choice above---to buy an already operational business, regardless of whether or not the business is a franchise, distributorship, or independent business. There are ten major benefits to you if you purchase an already existent business:

1. You, your relatives and associates, and your professional advisors (e.g., attorney and accountant) can study and investigate an existing business-for-sale’s business accounting records and tax returns to get a good idea of the company’s actual profit or loss to determine the fairness of the asking price for the business and to have some historical basis to project the possibility of future income and profit growth.  Actual, historical operating results are much more valuable to you in analyzing a company’s present and future value, and much more insightful than guesses as to what a startup business might be able to do in income, expenses, and profit or loss. You can also interview the customers and suppliers of an existing business to get uniquely-valuable insights into the value of a company, or the lack thereof.

2. Buying an existing business, even one that needs substantial changes to become profitable or more profitable, is a quicker way to making profits and cash flow than doing a startup business, which almost certainly will take two to five years to become both established and profitable.

3. Buying an existing business usually comes with experienced and capable employees who can make it easier for you to manage the company, as compared to your having to find and train employees with no experience with that particular business.  The existing employees can assist you in learning the ropes of how to run the business effectively and profitably.

4. An established customer clientele is the biggest advantage you will enjoy when you purchase an already operating business.   Acquiring new customers is one of the most expensive and difficult task for any business, especially for a startup business. It is easier to make repeat sales to existing customers, and it is easier to get word of mouth advertising benefits and referral sales from existing customers and the contacts and connections of the existing customers.

5. Established business procedures and protocols in an established business are very valuable to you as the business buyer because the established procedures and protocols are time-tested and experienced tested as effective ways to operate the business.

6. Established vendors and suppliers of products and services to the existent business is a huge plus to you in buying an established business. Finding reliable, value-priced vendors and suppliers is something that the existing business has already achieved. In contrast, a startup business is going to make many mistakes in learning which vendors and suppliers are the best value and the most reliable.

7. You save much time, effort, money, and aggravation when you buy an existing, successful business, in comparison to the huge amount of time, effort, and money you would have to otherwise expend to establish and develop a new business.

8. Circumstances such as the death, disability, or retirement of business owners, or current business problems of a particular business may result in your being able to buy the business at a big discount, especially in comparison to the high costs of a business startup.

9. Less government red tape is often encountered when you buy an existing, already-licensed, already-zoned, already-approved business enterprise. Obtaining building permits, zoning approvals, business licenses, tax registrations, trade name and trade mark registration, creation of a company website, and getting top search engine visibility for a company website and some of the red-tape advantages of buying an existing business, in comparison to a startup business.

10. Existing businesses have a business community presence and recognition that comes to a business only over a period of many years in treating customers right and in running the company in an efficient, fair-minded, customer-oriented, cost-conscious, and sales-oriented manner.