Buying an existing business can be less risky and more quickly profitable than starting a business from scratch. In fact, studies show that 80% of new businesses fail in the first 3 years but most established businesses continue to prosper after they’re sold. The advantages of an existing business typically include:
- Existing customer base means cash flow begins immediately.
- Established credit history and relationships with vendors
- Financial history with lending institutions may make obtaining loans easier.
- Established workforce lets you concentrate on strategic issues rather than hiring employees.
- Existing inventory reduces the guesswork on the type of merchandise to stock.
- A new owner needs to focus on learning to run the new business and increase sales, not on one time events such as site selection, equipment selection, and unproven inventory guesses.