9 Reasons Why Buying a Business Is Better Than Starting Up

To buy, or not to buy, that is the question many entrepreneurs ask when deciding whether to launch a brand new business or to take over the existing company. It is by no means an easy riddle because the right solution depends on so many factors and variables.

Both options have their pros and cons.

For example, a brand new business allows you to make a plan single-handedly and do everything exactly the way you want it. On the other hand, launching your own company is challenging due to a wide range of reasons. According to reports:

  • Nine out of ten startups fail eventually.
  • Common startup failure reasons include financial issues, lack of demand, strong competitors, and poor products.

However, the story is totally different if you choose to buy the existing company. In this article, we will discuss the nine most important reasons why buying a business is better than starting up. Let’s take a look!

1. It’s easier to secure finance

The first reason to buy the existing business is probably the most important. Namely, financial institutions are much more likely to lend you money in order to purchase the company than to give you a green light for initiating a brand new project.

Jake Gardner, a writer at a-writer.com, explains that it’s just a matter of professional risk: "No one enjoys losing money, especially banks and other financial providers. This is exactly why they tend to support already-established organizations rather than new and unknown business ideas."

Looking at things from their perspective, you will quickly realize that the odds of paying back the loan are much higher if you take over a company that is already alive and kicking.

2. You can start earning instantly

Launching a new startup, you will almost always have to wait for quite some time before you actually begin making money. It’s a natural stage of the business cycle that almost everyone must go through in the early phases of the business.

The situation is, of course, completely different when it comes to purchasing a business. In such circumstances, you can expect to start generating revenue immediately because the company already has a solid base of customers.

Besides that, you won’t have to waste time and money on finding new premises, acquiring professional tools and equipment, or licensing. Everything you need is already set up, so you only need to take over and start improving the company’s market position.

3. You are buying a well-known brand

Another reason to buy a business is that you actually get a well-known brand with all of its distinct features and public acknowledgment. You buy the company along with all the other features and elements such as websites, logos, visual templates, copyright, trademarks, and so on.

But here is a bonus tip – you can make the business look fresher through rebranding. That way, you can completely change the visual appearance of the brand, but still keep the name and loyal customers. It is the closest you’ll get to launch a new business from scratch.

4. Instant access to target consumers

Do you know that acquiring a new customer can be up to 25 times more expensive than retaining an existing one? It’s a major issue among newborn companies, but you won’t have to face it if you choose to buy the existing business.

Quite the contrary, you’ll gain instant access to the target audience, which means that you just need to continue building relationships and increasing customer loyalty in the long run.

You don’t only receive recurring purchasers but also obtain all of the consumer-related data. From contact lists to personal information, you can count on so many features that help you to identify a typical customer and customize offers so as to fit his/her needs in particular.

For example, buying an assignment help agency gives you the chance to learn everything about clients and learn how they would like you to write your sales memorandum. It’s a huge advantage compared to newly-found businesses.

5. Networking is simpler

Representatives of a well-known company don’t need to start from scratch and break the ice with every more or less relevant stakeholder in a given niche. Instead, you can count on the existing network of professional contacts that you only need to take over and keep nurturing it long-term.

There is no need to look for new suppliers, distributors, warehouses, accounting firms, marketing teams, money lenders, and so on. All of these stakeholders are already there, which means that you can maintain the workflow effortlessly and then start reevaluating the work of each partner separately.

In case you don’t like what you see, you may even change the partners you don’t like.

6. Work on business growth

Instead of worrying about getting your company off the ground, you can immediately start thinking about the growth of the entire organization. You don’t have to waste time taking baby steps, but rather concentrate on making professional operations better and more productive.

The idea is to identify shortcomings in current activities and/or units and then begin eliminating flaws one by one. That way, you can elevate things to the whole new level and boost professional performance almost instantly.

7. Trained employees are already there

A big benefit of buying a business is the fact that you already have a team of trained employees at your disposal. You don’t have to analyze resumes and search for ideal job candidates because you’ve got everything covered the moment you conduct the purchase.

It’s quite a big deal since employee onboarding and training usually takes a few weeks or even several months. If you don’t have time to lose, then buying a business is the right way to go.

8. You’ll take less risk

Another reason why entrepreneurs tend to buy businesses rather than launch new ones is that it reduces the risk to the bare minimum. Of course, we are talking about entrepreneurs who plan thinks carefully and understand how the existing company is doing at the moment.

If you discover a company with stable financial records and a solid customer base, you can hardly lose from a long-term perspective. On the contrary, your only job is to keep things running smoothly and invest in business improvements that could generate more revenue on the go.

Video: Why buy a business not build a business? | The Harbour Club

9. There’s less work to do here

The last reason to buy a company is fairly simple – you don’t have to work as hard as you would when starting a brand new business. The system exists already, which means that you should only keep things in place and make moderate and gradual changes over time.

There is no need for major interventions, particularly in the first few months upon takeover. You can let it rest for a while and run as usual because it will help you to figure out the pros and cons of the business. After that, you can step in and take action to improve the functioning of your new company.

The Bottom Line

If you are thinking about having your own business, you can consider two major solutions: starting a company from scratch or buying the existing organization. Both options have their pros and cons, but we used this article to explain nine reasons why buying a business is better than starting up.

Are you thinking about taking over someone else’s company? Do you think it can give you other advantages that we failed to mention here? Feel free to share your ideas and comments – we would love to see what you think about this important topic!

Justin Osborne loves to share his thoughts and opinions about education, writing and blogging with other people on different blogs and forums. Currently, he is working as a content marketer at Nerdy Writers.

Published by ExitAdviser


Content ID: 8424