Buy A Business in Raleigh, NC.
Wanting to buy a business in Raleigh? Research might just back up the fact that you are making a wise decision. Buying a business in Raleigh rather than starting a business from scratch helps entrepreneurs reduce risks, create instant income and take advantage of a loyal customer base.
It is believed that there are 15 prospective buyers on the market for everyone business listed for sale. In other words, you probably aren’t the only person looking to buy a business in Raleigh. One researcher recently reported that 50% of all Americans would like to own their own business but few ever follow through with starting or buying a business.
Why People Do Not Buy A Business In Raleigh?
1. Lack Of Experience- Fear of the unknown keeps many potential business owners sidelined. They have never purchased a business before so their lack of experience with the process can dissuade them from trying.
2. Finances- Most first-time business buyers have never checked into financing options. Veterans, women, minorities, and others are incentivized through SBA loans but very few have looked into the available options. There is also the option of seller financing.
3. Hesitation- Some individuals are on a never-ending search for the perfect business. They want a business with little risk, little time or effort and a business that serves as an ongoing cash cow. There is NO perfect business.
Business ownership is hard work that requires effort, patience, learning, and risk. We like to use the analogy of a farmer. Every spring the farmer prepares the ground and plants their seeds. What will the weather do? Will it rain too much, too little or just the right amount? The farmer really never knows but he is betting that his hard work will produce a harvest.
Anyone wanting to buy a business in Raleigh needs to be prepared for the same hard work and risks as the farmer.
The Numbers Don’t Lie
According to BizBuy, “Baby Boomers still own the majority share (53 percent) of small businesses. Two in three Baby Boomers have owned more than one business and 68 percent have owned their current business for more than 10 years. More importantly for the market, nearly 60 percent of Baby Boomers plan to sell their business within the next two years or less.”
Over 5,300 businesses sold in the first two quarters of 2018 putting business sales on pace to shatter previous business sales numbers. The growth can largely be attributed to a growing number of Baby Boomers exiting their business due to retirement. It is anticipated that over 30 trillion dollars worth of businesses will be sold over the next ten years as Boomers' head into retirement.
According to research by Statistic Brain, 25 percent of start-ups fail in their first year. With so many start-ups failing within their first-year investors are now turning to established businesses. Buying a business in Raleigh is no different when it comes to a less risky investment.
Russell Brown believes more people should stay away from start-ups because “We have all heard about the high mortality rates for new business ownership; 50% do not make it through the first three years and 70% will be gone after only five years. There are many reasons for this including; insufficient operating capital, poor management, an unworkable business concept, inability to develop a strong customer base, and just plain old bad luck.”
On the other hand, existing businesses have a proven track record of profits that will most likely continue long after the business sale. You get to apply your new ideas, expertise, and renewed energy to take the business to even higher profitability. Obviously, during the due diligence period, you and your accountant will need to verify the business’s success but a proven track record is a safe bet.
1. Financing- It’s much easier to secure financing for an established business rather than an unknown start-up.
2. Location- Long before you ever thought about buying a particular business it has operated in a specific location successfully. The fact that people know where you are is huge and it shouldn’t be overlooked.
3. Trained Staff- A business is only as good as it’s people. A generous, well-trained staff puts a business owner in a position to win immediately.
4. Immediate Income- The business that you are considering has paid someone consistently for decades and that should help you sleep at night. When someone launches a startup, it could be months or even years before the business can pay them a salary.
5. Proven Business Model- Recessions, staff turnover, changing demographics and other life events couldn’t close the door of the business that you are considering. The reason it has been around for decades is that they have a proven business model.
6. Loyal Customers- Imagine buying a business where customers have shopped for generations. Grandparents, parents, and children have all been in this business. When you buy a business in Raleigh with this type of customer base you have found the goose that lays the golden eggs.
7. Established Brand- People associate themselves with brands. This is what Dominoes Pizza is trying to get their logo tattooed on their customers like Harley Davidson brand freaks. An established business has this element of branding do to service, location, and product delivery.
Of the five to six million businesses in the United States with 19 or fewer employees, at least 1 million of these are for sale at any given time. Entreprenuer.com believes that “Instead of starting from scratch, look for a seasoned small business with three to five years of verifiable financial records and tax returns that coincide with the data on the financial statements. Businesses like these, with a record of growth, trained employees, a good customer base, proper equipment, and an established inventory, are excellent business opportunities. In fact, the failure rates of businesses that have been around for at least five years is quite low.”
Author Ed Pendarvis notes that various studies by the SBA and Department of Commerce have shown that between 65 percent and 90 percent of startup businesses are no longer operating after 5 years. In fact, most startups fail in the first two years because they run out of money before they can generate a positive cash flow.
As an entrepreneur looking to buy a business in Raleigh, you have a unique set of professional priorities. At the end of the day, your real goal is to own a successful small business to provide an income for you and your family. The safest and most effective way to accomplishing this goal may involve buying an established business in Raleigh.