14 Sep Benefits of Purchasing a Business
The road to entrepreneurship does not always begin in a garage. Sometimes the best ways to launch or expand on an idea is to purchase a business that already exists. In doing so, the buyer is immediately in a leadership role at a company that is already profitable, thereby avoiding much of the risk associated with launching a startup.
Purchasing an existing business provides the entrepreneur with many resources: a client and customer base; business connections and partnerships; equipment (depending on the industry); property; and many other facets relating to the industry. Additionally, the business will posses a financial history, which will give the new owner an idea of what to expect when attracting investors or securing loans for additional finances.
Talent and Operations
Typically, a purchased business will already have a team of employees and management in place. This human capital can assist with integrating the new entrepreneur into the business and its operations, avoiding any downtime in revenue generation. The team is also likely to have operations, systems and processes established and working, which helps to streamline the company to keep growth moving forward. This allows the entrepreneur to observe, analyze and tweak the current operations to increase the efficiency of the business.
Marketing and Branding
A challenge many startups face is discovering their ideal target market and building their brand to attract customers. Unlike a startup, identifying competition and target markets as well as creating a demand for the product or service has already been completed. This means there will be less work required to refine the business plan and more time to focus on improving current processes and driving innovation.
Acquiring an existing company presents many opportunities and reduces a lot of the challenges and headaches that coincide with launching a startup. While purchasing a business can provide many benefits, it is important to conduct thorough research and to possess a deep understanding of the market and company prior to immersing into the new role. Working with a business attorney can help an entrepreneur avoid the pitfalls of purchasing a poorly run company and find one that is a perfect fit.