Should you buy an existing business?

Advantages of Buying an Existing Business

1. The necessary permits and licenses to operate the business are already filed with the proper agencies. You will also be the owner of valuable proprietary rights – patents, trade names, brand names, copyrights and the like.
   
   
2. It is easier to obtain a loan from the bank or from investors – both are more comfortable lending money to a business with a proven track record.
   
   
3. The business already has an existing product or service for sale, while a start-up business still has to develop a product or service and market it with no assurance of success.
   
   
4. The customer base is already established. You only have to maintain the existing customers and you can try to increase sales by exercising the same standards that brought the company to where it is now. It will take a new business many years to build a customer base.
   
   
5. An existing business already generates cash flow and profits.
   
   
6. The business has built a reputation in the industry and market. Just advertise that the business is under new management. A starting business, though, has to spend a lot of money on advertising to introduce the company, what it offers and where it is located. It also has no track record or reputation.
   
   
7. There is an existing network of vendors or suppliers. Business systems for marketing, inventory, operations, maintenance, sales, etc. are already in place. These may need only some minor modifications.
   
   
8. Knowledgeable employees already familiar with running the business are in place whereas a new business needs some time to find employees and train them.
   
   
9. The risk of failure is far less as you can learn from real historical performance to help you make decisions. Problems or kinks on most aspects of the business have already ironed out.

Source: globalbx.com