Are you interested in becoming your own boss? Did you know that people who buy a business are statistically more successful than people who start a new business?
For the past decade, I have worked with entrepreneurs at all business cycles, I have met with hundreds of business owners, written business plans, conducted market research, and provided counsel throughout their startup process.
Over the past five years, I have focused on businesses looking to sell and people looking to buy a business. I have tracked pain points and successes, and these are my top six reasons why entrepreneurs should consider buying an existing business.
- Mentorship – The existing owner is sometimes willing to stay on for a period of time to mentor the incoming owner. Starting a business can be overwhelming, but an existing owner can help you increase your chances of ordering properly for busy seasons, maintaining current clients with a warm handshake introduction, and making sure important documentation such as GST, corporation, and deduction filings are done well and on time.
- Financing – Many existing companies have three or more years of profitable financials, which makes it easier to secure financing whether you are going to a traditional bank, government organization or looking for venture capital.
- Cash flow – An existing business already has customers and ongoing cash flow. Launching startups usually takes longer to set-up, open and find customers. Therefore, buying an existing business will provide you added security with both your company and personal cashflow.
- Established Name – A book of business and a good reputation in the community is called “goodwill”. People are creatures of habit; if they have gone to the same barbershop for 20 years, they will likely keep going after there is a new owner. Make sure you get the company’s phone number and domain name in the purchase agreement.
- Current Staff – only one out of ten startups make it past the second year, and many of these fail after they try to grow and add more staff. Onboarding can be tricky. Having existing staff in place that is already trained in their position can dramatically increase the odds of having a successful business.
- Market Position – Already own a business? Acquiring your competition is a great way to rapidly increase customer base, market share, resources, and equipment.
Take the first step to buying a business; join us for this Free webinar: 7 phases of buying an existing business or franchise.
*Article originally published on Alison Anderson’s LinkedIn account.
Alison is the CEO and Founder of a company called SuccessionMatching.com, an online platform that matches buyers and sellers of businesses and farms. By analyzing data from the website and working with thousands of entrepreneurs, Alison has developed strategies and resources to help buyers and sellers overcome the pain points and set up successful transitions.