Are you planning to invest on an existing business but still has to finalize your decision? The following reasons might help you to decide:
Ready-made Infrastructure – The acquisition of the business usually includes the inheritance of the pool of customers, suppliers, and employees, as well as the existing equipment and processes. Due to this, you can already divert your attention to building the business and working on its further success.
Purchase Price – We are often told that existing businesses require a bigger amount as compared to start-up businesses. But in some cases, it’s deemed less expensive plus you know that you are already benefiting from what you have paid for.
Negotiation Flexibility – There is a more room for negotiation for the acquisition of an existing business when it comes to the asking price and the terms of payment. But make sure you get to have an access to accurate data to put you in a better position to set a favorable price.
Ease in Securing Financial Assistance – Financial institutions give more favor to established businesses than to start-up companies. To them, there is less risk seen because of the track record of the company.
Generation of Income at Day One – It takes a long time for most start-up’s to generate earnings. They are expected to incur additional expense on their first few months. But for existing businesses, given that there is already a customer base and that the business can already operate because processes have already been established, it is quite expected for the business to already produce money on the first day of your ownership.
Existing Client Base – An existing business need not make an effort to attract potential customers; certain customers that have been loyal to the company, are expected to still patronize your products and services.
Network of Contacts – Existing businesses have already formed their relationships with vital third parties such as suppliers and other marketing contacts inside and outside Ontario. There’s no need to take time to look for suppliers because the owner will just introduce them to you once the acquisition is done.
Well-trained Staff – You must be thankful to the previous owner since the employees are trained and are expected to deliver good results. Once the turn-over has been finalized, given that buyer
Risk – It is seen to be less risky to finance and/or invest for an existing business as it is expected to perform well in terms of sales. A start-up business, on the other hand, is considered a big leap when it comes to financial security.
Work – Once you take over an existing business, given that the processes have already been established and the employees already know how to manage the operations, you don’t have to be totally hands-on to keep the business running. You may leave it in the hands of your staff while you roam around the busy streets of Ontario to observe the buying trends of your target market, so you can formulate your growth strategies for the business.
For more articles about buying and selling existing businesses, kindly visit Business Sale Ontario.
