Some people want to create their own company from scratch so that everything is set up exactly as they want. When people go down this road, however, they can quickly realize how difficult this actually is. There are so many things to learn and to put in place – ranging from finding premises to drawing up action plans, and from recruitment to website creation.
Statistics demonstrate that 40% of businesses fail within the first twelve months. This means that anyone who starts from nothing will be taking a greater financial risk. As a result, many people prefer to buy a business that is already running. This choice can present a host of different benefits, and we’re going to take a look at seven of them right now.
1. You Can Learn From The Manager
The previous owner will be further down the road than you are. They will know where the gains are to be made, and which pitfalls to avoid.
The best scenario is where the individual stays during a handover period. This can be a vital time when you learn the ropes. They may even introduce their existing customers to you, to help the business remain within the company.
2. You Can Gain Valuable Information Online
In addition to this valuable mentorship, there are also helpful business websites you can access. A trawl through this site demonstrates that company owners want to access information about small businesses and tech budgets. They also want to learn about the US economy and discover how to build an emergency fund.
3. The Finances Should Be Easier
Some people need to gain loans or investments before they can afford their own startup. They would therefore need to sell their business plan and financial projections to the bank or lender. If money is being borrowed to buy a company, however, you will already possess a host of key data. This will include its financial accounts, sales history, and customer database.
It’s not a comfortable ride financially when you set up your own company and wait for the money to come in. It could take months to occur, and years to make a profit. If the business already exists, there will be active customers providing an income when you take it over.
4. The Company Will Be Already Staffed
It’s worth comparing the experience of recruiting from scratch and training people up, to acquiring staff who are already skilled and experienced.
The existing staff may be nervous as to how the business will develop under your new ownership. Having said that, they may be relieved they still have a job, and be keen to gain your favor.
5. You Will Be Able To Delegate Responsibility
If you create your own business, there may be no time or money available for you to have a break. You may be the only person who knows the job.
Should you buy a business, however, there will be staff in place who know more than you do. Not only can they teach you, but they may also be able to cover your absence for a day or even longer.
6. Your Company Will Be Already Known
If the business has a recognizable brand and an excellent reputation, you will inherit it. Your company will be known before you have spent a dime on advertising, too.
To reap the maximum benefit from this acquisition, it’s key that you gain access to the existing trademarks and copyrights. The fewer external changes there are, the better. This means you’ll need to secure the company name, business phone numbers, and website. The latter will be where many of the existing inquiries and new business have been coming from. Be careful not to reinvent the wheel: if the site is working, only change necessary things.
7. You’ll Already Have A Market Share
Ideally, the company’s existing clients will be happy to continue to use the company. As we mentioned earlier, a handover from the previous manager could help this process. In the worst-case scenario, people may say, ‘Roger always did it for me. If it’s not him, I’ll go elsewhere.’
One way to defeat your rivals is to acquire them. Some companies get bigger and bigger as they do this. It’s worth keeping this as a future possibility should you continue to grow.
As we have seen, it’s great to walk into a situation where everything is already up and running. You’ll already have suppliers and contractors, stationery, and so on. This should free you up to developing the business further. Once again, this is not a luxury available to self-starters.
