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Despite the economic downturn of the last few years, small businesses have still been cropping up left and right. The financial woes of the country haven’t dampened the entrepreneurial spirit the country is known for. But starting a business from scratch is hard. It takes a lot of work, dedication, and patience, not to mention a lot of time and money. Buying an existing business isn’t exactly going the easy route, but it may at least be easier. Here’s how.
You Save Time and Money
Whoever started the business already did all the legwork for you as far as market research, writing a business plan, and getting all the paperwork and licensing (if any) in place. Those things take time and sometimes a lot of money, depending on the business. Then there are the actual startup costs such as leasing space and buying equipment, not to mention putting mechanisms in place for things like payroll and insurance.
There aren’t nearly as many steps to buying a business as there are to starting one from scratch. Just be sure to check (or have your attorney examine) everything to be sure it was properly put into place, and that there aren’t any kind of legal issues waiting to happen.
You’re Buying a Brand, Not Just a Business
Depending on how long the business has been in existence, they may have already built a loyal customer base that you will now be able to tap into. If the previous owner was any good at marketing, you’re also acquiring brand recognition that sometimes takes years to build. An easily recognized name and a trusted brand are invaluable to a company’s success.
To be able to step into a business where those two key components have already been established is worth the cost of the business alone. The important thing to remember is not to change things too abruptly or you risk losing that customer loyalty. Remember, there’s a reason they already like the business and services or products it provides. It’s difficult to build customer loyalty, but twice as hard to rebuild it once it’s lost.<
You Gain a Built-In Staff
Most of the time, when someone purchases a business, the existing employees are included in the deal. This is desirable for everyone. The employees get to keep their jobs, the seller doesn’t feel guilty about leaving his employees in the lurch, and you gain a knowledgeable staff. Training employees is time-consuming and expensive. Retaining employees when you buy a business not only saves you that time and money, but gives you a ready resource of information about daily operations.
The people who work there already know all the ins and outs of the business. Don’t deny yourself that valuable resource by trying to start over with new employees. And just like you want to avoid jarring customers by making changes, the same goes for employees. Take some time to see how things work, and then include them in any process changes you want to make or you may end up with a mutiny on your hands.
Entrepreneurs get a tremendous amount of satisfaction from starting their own business. But if those headaches just aren’t for you, consider buying a business instead, and increase your chances of success.
About the Author
Anita Campbell is the Founder of the Small Business Trends website and CEO of BizSugar, an online community of small business owners.