May 21, 2019  
 
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Why Buy a Business

 

Buying a Business to Get an Established Brand

Starting a business from scratch means building a brand from scratch – not an easy task in today's highly competitive business environment. Consider buying a business instead and you'll inherit an established brand.

If they knew in advance what it takes to build a successful small business from the ground up, most entrepreneurs would abandon the idea of a startup company before they ever begin.

The simple truth is that launching a startup business is a highly risky and exhausting way to break into small business ownership.

Many business owners wisely choose to buy an existing business rather than create a new company from scratch. One of the reasons behind their decision is branding. Brand recognition is an important factor in business success and with so many brands competing for the public's attention, it can be difficult to imprint a new brand on the buying public's psyche.

Although companies with highly recognizable brands usually come at a premium, it's possible to buy a company that has started the branding process and is well on its way to widespread visibility. If you're on the fence between launching a startup and buying an existing business, here's a few reasons why it makes sense to buy a business to get an established brand.

  • Value. If an established brand is regarded as an industry leader, its current owner is probably well aware of its value. But that's not the case with most companies that are listed on the business-for-sale market. Brands have intangible worth that is often undervalued by sellers. As a buyer, you can translate a company's hidden brand value into profits after the sale.
  • Competition. In the early days of branding, few entrepreneurs understood the process or importance of establishing a brand. Those days are over. Companies now engage in fierce battles to garner attention for their brand. Established brands have a clear edge over startup brands because they already have footing in the competitive arena.
  • Brand assets. When you buy an established brand, you're buying more than just a name and a logo. Brand acquisitions almost always come with other assets that have value to the new owner including websites, marketing concepts and visuals.
  • Salability. A business with an existing brand is worth more than one that is struggling to achieve recognition with consumers. Assuming you continue to grow the brand during the time you own the business, the brand will have a much higher value when you sell the company – or at least more value than it would have if you were building the brand from scratch.
  • Convenience. If given the choice, most business owners would avoid the process of establishing a new brand. Buying a business with an existing brand makes that option a reality and frees you up to concentrate on other parts of your new business.

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