The Benefits of Buying Established

The Benefits of Buying Established

Many future entrepreneurs ask themselves whether they should start up their own business or buy an existing one and there are certainly pros and cons to each. To decide on their ultimate path, prospective business owners need to ask themselves the following questions to figure out what will work best for them and their business plans.

How unique is my business idea? If the business idea and consequent plan is new to a specific location, there may be not be an appropriate businesses available for acquisition. On the other hand, most small businesses are based on similar proven business models, so an established business could easily be molded into the owner's dream business with less effort than starting from scratch.

How much am I willing to risk? With the purchase of an established business, one can reasonably assume that it will continue to be profitable after the purchase, if it has been profitable in the past. Setting up a new business from scratch is certainly riskier than buying a business that has proven revenue and a customer base.

Can I use the assets and/or location of another business? Not every purchased business is bought for cash flow, enter the asset sale. An asset sales is the sale of a business where company assets determine the sales price and this sale is often significantly cheaper than it's cash flow counterparts. Asset sales have many benefits such as previously completed build outs and equipment, or a location that would otherwise be impossible to find.

What responsibilities of a business owner would I enjoy? If a future entrepreneur wants to control their business down to the equipment purchased, licensing, processes etc. than starting their own business may be the better route. However, if they are more interested in running the day to day of a business, rather than setting it up, acquiring an established business will offer just that reality.

To discuss buying a business versus starting a business, I invite you to schedule a consultation with one of our experienced brokers today and they will be able to guide you through the decision making process!

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Rachael Holstein joined the Transworld Team in 2016 as Marketing Coordinator. Her working experience has been largely focused on Business Development and Marketing in the finance, architecture, property management, and information technology industries. A longtime resident of Cleveland, Ohio, she attained her Undergrad from John Carroll University and a Master's Degree in Global Interactions from Cleveland State University. She relocated to Denver in 2013 for a change of scenery and a bit of adventure.