How to Weigh the Pros and Cons of Buying an
​         Existing Business
                    by David Dixon

According to statistics, about 60% of new businesses fail in the first three years. One way to increase your chance of success is to purchase an established business. However, it is important to weigh the pros and cons before you make a decision.
 
Pros of Buying an Existing Business
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One of the primary benefits of buying an existing business is that you already know how the market has reacted to the products or services it sells. You can read customer reviews and analyze sales data to determine whether the public is enthusiastic about the business. 
 
Buying an existing business also requires less startup time than starting one from scratch. You may not be able to open immediately, but it should take much less time to get started because processes, equipment, and staff are already in place.
 
Because you can demonstrate a track record of success, it is easier to get financing for an existing business than for a startup. Investors and lenders are not taking as big a risk when they fund an existing business.
 
Existing businesses come with an established customer base, so you can focus on growing your base, rather than attracting your first customers. This can help you become profitable faster.
 
Cons of Purchasing an Existing Business

Buying an existing business also has some downsides. First, you get what you pay for. If the purchase price is cheap, then there is probably a reason for it. A thriving business is not going to sell for a low price. You need more money upfront to buy a successful business than to start a new business.
 
You may need to make changes to processes. If you are hoping for a turnkey business, it is important to ensure that the existing processes work before you buy.
 
Watch out for businesses that have a bad reputation. These businesses may come with a temptingly low purchase price, but winning back customers can be an uphill battle, particularly if there are many customer complaints, poor reviews, or legal actions against the previous owners. 
 
Another factor to be wary of is outdated processes and technology. If you have to upgrade all the processes and equipment, you lose a lot of the benefits of buying a business versus starting a new one.
 
Do Your Due Diligence

Never take the seller's word for it on any aspect of a business you are considering buying. Analyze the financial records and the market. Inspect the location. Talk to employees and customers. You may need the help of an attorney, accountant, or other experts.
 
Marketing Your Business

Whether you start a new business or buy an existing one, marketing is critical for its success. Create an eye-catching banner to use on your website and social media pages to help build brand awareness. You can save money by using an online banner maker instead of hiring a designer. Choose a banner that fits your brand and then customize it with text, fonts, colors, animation and video. You can then use your custom banner on your Facebook, Twitter feed, YouTube channel and website.
 
Purchasing an existing business can be a good way to jump-start your entrepreneurial career. However, there are also potential drawbacks. It is important to weigh the positives and negatives before you make a purchase. Research and analyze the business you’re thinking of buying and be sure you can market it effectively.
 
Visit FUNEL Business Management Group for personalized solutions for growing your business!