Many companies get incorporated every single year, but a few years down the line, most of these startups usually close shop. It takes 5 or more years to achieve success in business, so entrepreneurs are advised to have patience. If you have some capital and want to venture into business, you must consider all your options. You can decide to start a business from scratch or you can buy an existing business. Both options have pros and cons that investors and entrepreneurs need to be aware of. Below are 7 advantages of buying an existing business:
- Existing Customer Base
Startups usually struggle to attract and maintain a loyal customer base. The failure or success of a business in attracting new customers and converting them to loyal customers makes the difference between success and failure in business. When you buy an existing business, you will acquire an enterprise with an already established customer base. This means that you can continue to make money without having to worry about investing a lot of money in marketing and promotions.
- Saves Startup Time
Startups usually take a lot of time to establish. In between finding suppliers, and installing furniture and fittings, the entrepreneur also has to worry about hiring suitable employees and finding a suitable business premise. When you buy an existing business, you will not need to worry about any of these, so you can save a lot of startup time.
- The Brand is Already Established
Brand recognition is a key requirement for business success. Customers usually associate with brands they are aware of and can trust. When you buy an existing business, you’ll be investing in a known brand with a decent following, so you can save a lot of money and time promoting your brand.
- Get Financing Easily
Lenders often consider a variety of factors before approving applications for business financing. One of the main factors they consider is the history of the applicant. Since startups do not have any history, getting financing is usually a daunting task. By acquiring an existing business, you can easily get sufficient financing to grow and expand the business.
- The Product Has Been Tried, Tested, and Approved by the Market
The main advantage of buying an existing business is that the product or service offered by the company has been tried, tested, and approved by the market. Therefore, it is less likely that the business is going to fail. Many startups fail because they offer products or services that have neither been tested nor approved by the market.
- Stability
The vast majority of businesses usually fail within the first few years of their life. By purchasing a business that has already passed through the startup phase, you will minimize the risk to your investment.
- Guaranteed Returns
Existing businesses can easily be valued. This is because they have financial statements spanning several years. Therefore, you will get exactly what you pay for. When starting a business, you will have to pump in a lot of money and invest a lot of your time. However, you may not get your equity back if the business fails.
About MergersCorp M&A International
MergersCorp M&A International helps business owners to find a suitable buyer for the business and investors identify a viable business to acquire. MergersCorp M&A International has a team of competent, reliable, objective, and experienced experts who can value a business enterprise, carry out due diligence, negotiate the price and help the investor close the deal.
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