Why You Should Buy an Existing Business – Rather than Start One

existing businessOwning a business is part of the American dream. It’s very, very common for people with entrepreneurial energy to want to own their own business. Half of Americans will list this as a personal goal. Many of them are focused on starting their own businesses, however, and get bogged down in all of the steps required to make that happen. At Calder Capital, we know that owning a business doesn’t have to mean starting from scratch. There are a number of reasons why buying an already existing business is better than beginning your own, in fact. Let’s go over them.

Benefits of Buying an Existing Business

An existing business has already proven itself to be viable. One of the big gambles entrepreneurs take when they start from scratch is betting on the profitability of the business’s concept. When you buy an existing business, you will know exactly how capable of turning a profit it is. You will not have to invest in real estate or equipment upfront worrying about what it can be sold for if your business concept is a dud. Typically, an existing business has a building, inventory and equipment, a customer base, an established brand, experienced employees, policies and procedures already in place, and relationships with vendor and suppliers.

An existing business has lower initial operating costs. None of the above have to be purchased or cultivated as they already exist. Your initial investment, then, is lower, and you can choose to acquire a business that is paying for itself. You will be able to tackle any unprofitable sectors or aspects with your full focus or put your money into expanding the business instead.

It’s easier to obtain financing for an existing business. As an established business is less of a risk than a start up, lenders and investors are more liking to extend you financing for it. The company already has a history of performance and data about market position, customer base, and competitor for them to pore over, so they will not feel like they are gambling either.

An existing business may have valuable intellectual property that transfers over to you, including patents and copyrighted materials. If your goal as an owner is expansion or even franchising, that intellectual property may be as valuable as the business itself in the long run. Typically this is included in the sale of the business.

Are You Interested in Purchasing an Existing Business?

If you’ve never considered buying an existing business, now is an excellent time to become familiar with what is already on the market. Even if you are not ready to make a commitment in the present moment, familiarizing yourself with the different types of businesses for sale will help you narrow down what you think would be most suitable for you as an owner and a manager down the line.

Calder Capital helps business owners who are actively looking for specific types of companies to acquire. We work with strategic and private investment office buyers nationwide, and we assist with buy side representation for companies that know their acquisition criteria and desire to make numerous acquisitions in the future. We are always happy to introduce qualified buyers to sellers as well.

Every year more than 500,000 businesses change hands. Will 2018 be the year you will realize your dream of owning your own business?

 

Calder Capital, LLC

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