Buying an existing small business can have a number of benefits, including access to financial statements, employee records, and other documents that give you a clear picture of what you’re getting yourself into. Small businesses are changing hands at an unprecedented rate – here’s why you should consider buying one:
1. Established Businesses Are More Likely to Be Profitable
When you buy an existing small business, you’re getting a business that has already been up and running – and as we all know, businesses that are already profitable are far more likely to stay in the black than those that aren’t. In fact, according to statistics compiled by the SBA, 82% of businesses that are sold are profitable at the time of sale.
2. You Get an Established Customer Base & Revenue Streams
Another big advantage of buying an existing small business is that you get an existing customer base and revenue streams right off the bat. This can help cover the costs of your purchase and keep cash flow positive as you work to grow the business even further.
3. Experienced Employees & Vendors in Place
When you buy an existing small business, you also get the benefit of experienced employees and vendors who know how to get the job done right. This can be especially helpful if you’re not familiar with the industry or don’t have any prior experience running a small business. Of course, it’s always possible that you may want to make some changes once you take over – but having experienced employees and vendors in place can make for a smoother transition and help ensure that things continue running smoothly even as new leadership comes on board.
4. Financing May Be Easier to Secure
If you do need to secure financing to help with your purchase, keep in mind that the Small Business Administration (SBA) offers several loan programs designed specifically for small businesses.
5. A Trusted Brand Might be Included in Your Purchase Price
If the small business you’re interested in acquiring has been around for a while and has built up a strong reputation in its community, then its brand name could potentially be included in your purchase price – which could save you thousands (if not millions) of dollars down the road in marketing and advertising costs as you work to grow the business even further.
These are just a few of the reasons why buying an existing small business can be a smart move. Of course, you’ll still need to do your due diligence before making any final decisions – but if you do, then there’s a good chance that you could wind up with not only a successful business but one that will also provide you with a steady stream of income for years to come.