Many, whom wants to start a new business, are so focused on incorporating their company that they seem to forget that buying an existing venture is also an option.
Actually, it is recommended for everyone getting their hands into business to weigh in the advantages and disadvantages of registering a new company and buying an existing business before making a move.
Here, we can look at some benefits of buying and owning a business for sale, against incorporating a company:
Income from Day One
An existing business already has customers. Thus, instead of waiting for several days to sell your product or service, you can gain income from the hour you start working on your new store.
A Better Insight on the Market
When you want to start a new company, you will need to spend some time researching the market. This also includes a lot of doubts and stress regarding whether your idea is a viable one. However, in the case of an existing company, you can know its profit margin beforehand, so there will be minimal investment risks. You will not have to ‘hope that your idea works.’
Easy to Secure Finance
Lenders are more likely to provide funding for already established businesses than new ventures. This is because established businesses have already proved that they can generate income. Thus, investors feel more secure putting their money into it.
Networking and Contacts
You will save yourself from spending a lot of time and energy in building contacts and knowing suppliers if you buy a company rather than starting a new one.
A lot of your resources will go in gathering and training employees while starting a new venture. However, if you buy a business, there will already be an experienced workforce, which means there is lesser work for you to do to get the business running.
Buying a business does have a lot of benefits over starting your own company. However, it is risky as you can lose money if you make a bad investment. Thus, it is in your best interest for you to seek suggestions from some good business advisors if you are interested in putting your finance in an existing company.