Here’s a look into the main advantages that make buying a business the better option.
Many people like the idea of launching their own business and leaving the 9-to-5 behind to become their own boss. But you don’t need to come up with a revolutionary idea to start your own business. You don’t even need to start anything if you don’t want to.
Instead, the best option might be to buy an existing business.
These days, many businesses operate exclusively online, and purchasing websites is easier than ever. You might find that you are more skilled at taking over a business than starting one from scratch.
Why Buy a Business?
There are many reasons why buying a business makes sense.
Here are some of the main advantages over starting your own business:
You already have a customer base when you buy a business, as long as the business is relatively successful. Part of the difficulty when starting a business is building your customer base, so you won’t have to worry about this. Most online businesses will also come with already valuable social profiles, saving you a lot of time when it comes to building a following.
As well as the customers, you will also benefit from other relationships with the vendors, suppliers, banks, insurance companies, and more, which can take years to build up.
You Know It Works
The concept of the business is already proven, compared to starting a new business where you simply don’t know whether it will be a viable business or not.
Easier to Finance
Because it is a proven concept, it is often easier to get financing. Starting a new business is always a risk, and getting financing can be hard, but investors will be more comfortable lending you money when they can already see the business’s track record.
Profits from Day One
There is no need to worry about establishing cash flow when you take over a business because that has already been taken care of. When you start a business, it may be months or even years before you start making a profit.
Existing Marketing Channels
You will already have some marketing channels in place along with data to use. For example, the business might have grown using Facebook ads, and you will have a huge amount of data about the ads that work and don’t work. You can then fine-tune this rather than start from scratch. And because you already have a brand, it can be easier to attract new business. See more digital marketing tips.
SEO falls under marketing, but it deserves its own category because it’s so important. Your new business will already have a domain name with value, and hopefully it is generating traffic. At any rate, it is older and should have more authority, making it easier to optimize for search. Rank any promising websites for sale from an SEO standpoint and monitor their domain metrics and backlinks to make sure you’re investing in a solid site with no bad history.
No Need to Train Employees
Existing employees will not need training. They will already be familiar with their roles and know exactly what they are doing, so there is no need to train them up. VAs can be worth their weight in gold — we’re not just talking physical employees.
Starting up a business can be tedious and time-consuming, but when you buy one you can get straight down to business, growing the business from day one to make more revenue rather than spending time building it up.
You will save money on equipment, computers, furniture, chairs, and the premises, which cost a lot for startups. If it’s a purely web-based business, you will save time and money when it comes to the site build and content.
Overall, there is less risk for you. Most new businesses fail, with 80 percent failing within the first 18 months. Unless you buy the wrong business, you won’t have to worry about this.
Potential Problems with Buying a Business
Despite all these benefits, there are issues to be aware of when you buy a business, so you need to make sure you approach this opportunity carefully. Some of the potential problems include:
You might find out that the employees are not thrilled by the change. They may be uncooperative and some might even leave. Same for loyal customers!
The business might suffer from a negative image, and this could be difficult to change around in the short-term. Online reviews can be tricky to bury.
There may be contracts made by the previous owner that are not great contracts but that you now have to honor.
The business might have inventory problems.
The premises or website might not be suitable for the plans you have to grow the business.
These are just a few possible problems, and there can be any number of other issues that can prevent your purchase from going smoothly. You can reduce the chances of things going wrong by doing your research and spending time finding out as much as you can before you offer to buy it.
Steps to Follow when Buying a Business
If you decide that buying a business is the right option for you, it’s time to get going. Here are a few general steps to keep in mind:
Choose a business niche that you are interested in and that you know you could make a success of.
Start looking for businesses for sale. There are organizations that can link you up, or you could talk to business owners directly because you might find they are open to offers. Online business marketplaces offer an open-source way of buying a business, but make sure you make contact with the seller and don’t just go off the public listing.
Once you have a business in your sights, put together an acquisition team including an accountant and attorney and do your due diligence. Review all the information and find out about its revenue, why it is for sale, how it is perceived, its future outlook, and more. If you are buying a mid to low value site online, all you’re going to need is an ESCROW account for the safe transfer of funds.
Talk to customers, suppliers, and vendors to find out about its business relationships and its reputation.
Only when you are happy that you are onto a winner should you go ahead and seriously think about making an offer.
Start Your Search
If you want to be your own boss, there are other options to starting your own business. Buying a business comes with many potential benefits, and it could well be the better option for you.
If this interests you, start your search and take your time over it. Speak to as many people as you can, and find out about potential opportunities. Don’t rush into anything, but take your time searching for the perfect opportunity.
Then enjoy growing your new business and enjoy all the benefits of taking over a business rather than starting one from scratch.
About the Author: Kayleigh Alexandra is a content writer for Micro Startups — a site that donates all of its web revenue to charities supporting startups, entrepreneurs, and other worthy causes. Check out the blog for your latest dose of growth hacking news. Follow us on Twitter @getmicrostarted.