Why Buy a Business

Buying a Business to Avoid Trial By Error

Never underestimate the value of a proven business model. When you buy a business, you avoid making all of the mistakes that the previous owner made when they started the business from scratch.

A proven business model is worth its weight in gold.

But as many small business owners will tell you, finding the right model for a startup company can be elusive. If you're starting a business from scratch, you'll need to keep a bottle of Tylenol on hand for the inevitable headaches and heartaches you will experience on the road to turning your startup into a well-oiled business machine.

Buying an existing business can eliminate much of the trial and error that happens in a typical startup. Rather than making educated guesses about what might work, you gain the benefit of a company with proven strategies and processes. You'll still have to make decisions and you'll probably make your share of mistakes, but the learning curve will be much shorter and the consequences will be much less severe.

You have your own reasons why you want to own a business. But the reasons for buying a business to avoid trial by error couldn't be more clear.

  • Staffing. Startup business owners are often plagued by staffing issues. Attracting and retaining talented professionals isn't the easiest thing to do, especially when your company is just getting its feet on the ground and its future is far from certain. An existing company has a settled labor force. They may not all stay on after the sale, but many will - and that will make your life a lot easier.
  • Established systems. A profitable small business is a lot like a jigsaw puzzle. There are dozens of pieces that need to fit together properly in order to achieve growth and long-term profitability. When you purchase an existing business, you gain systems, departments and divisions that have a track record of functionality.
  • Efficient workflows. If the business you are buying has been around for a while, it's likely that workflow inefficiencies have already been identified and rooted out. The due diligence process will shed more light on workflows, but you should expect to see smooth processes and operating procedures.
  • Existing supply chains. Another nice thing about buying a business is that you inherit the company's supplier and vendor networks. Unless the company has binding service contracts, you can change suppliers - but why would you if the supply chain is already reliable and cost-efficient?
  • Tested infrastructure. The advantage of a tested technology infrastructure alone should be enough to sway you toward buying an established small business. You will sleep a lot better at night knowing that your new business is equipped with the resources it needs to do business effectively.
  • Market analysis. Marketing a startup means spending a lot of money in exchange for minimal results. Existing companies have already tried multiple marketing strategies, saving you the pain of investing in campaigns and initiatives that have no real impact.

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