Advantages of Buying An Existing Business
There are many significant advantages to buying an existing business versus starting a new business.
What better way to guarantee success than to review actual operating results rather than projections? If a business has been owned and operated by the same owner for a number of years and if that business has been the source of income for his family, you can be reasonably sure that the business is profitable and viable.
Here are a few of the many other advantages of buying an existing business:
Immediate cash flow
No expensive advertising to lure customers – the cash register starts ringing the first day you take over, just like it did the day before for the seller of the business.
Trained employees in place
When you take over the business, you will have a complete crew of trained employees to run the business. No down time for training and no customer dissatisfaction with untrained employees.
Established suppliers and credit
For the most part, the existing vendors will continue to do business with you without missing a beat. Remember that they have been supplying the business for a while and they know it is a good business. They don’t want to lose your business, they want you to succeed and buy more goods and services from them!
Established customers and referral business
Your customer base is already in place and it will, through referrals, continue to grow – unless you drive them away.
Existing licenses and permits
In many cases, all you have to do is transfer the licenses and permits to your name. In those cases where you have to re-apply for a license or permit, you have the comfort of knowing that the business, in its current location, was approved for the license or permit (for example, a liquor license for a restaurant).
Training by the seller
In addition to the trained employees, you will receive training from the seller in how to operate the business. You will be introduced to customers and suppliers and will get the benefit of the seller’s extensive experience in running the business. You will not have to make the same mistakes the seller made!
The availability of owner financing
Over 90% of the businesses sold by Pacific Business Brokers have a portion financed by the seller of the business. For reasons we will discuss in more detail in person this may be the single most important advantage of buying an existing business. The seller who finances your purchase of his business has a vested interest in your success.