Have you wanted to become an entrepreneur but couldn’t decide on an idea to run with? Maybe starting a business seems too risky, or you can’t be without an income and need to make a living wage to support your family while you start your business?
There’s another way to become an entrepreneur; buy your way in!
How it works
Along with your down-payment, some creative structuring with the current business owner, and access to institutional lending, you can acquire an existing business.
Benefits of Buying an Existing Business
- An existing business has established, and most importantly, paying clients. You‘re likely to have some revenue from day one.
- If there are employees, you are inheriting trained staff.
- Processes are already in place that have been tested and proven. These should be recorded in handbooks and manuals so you are receiving a guidebook when you acquire a business.
- If the business sells a product, you are getting access to suppliers and often with better rates than if you were to set up the same business from scratch. Because the business likely has a proven track record, the business may qualify for volume discounts or be “grandfathered” in at a preferred rate.
- There will be an existing brand that people know and trust.
- Training and mentorship are typically negotiated into the purchase price from the exiting owner.
- A salary can be carved out for you that meets your needs if the profitability and purchase price are aligned.
- Best of all, if you’re looking to buy an established business that has good cash flow, you have a good chance of acquiring financing to buy the business with help from a bank. The monthly loan payments are then paid for from the cash generated from the business itself and not your own pocketbook.
These are just a few of the benefits. Still wanting something of your own?
Make it Yours
Buying a business is only the first step, once you get your hands dirty and learn the ropes you’ll have a good sense of how you can make improvements to the business, continue to grow it, rebrand, and make it your own. The strategy is to BUY first; then ADAPT. Over time the business will feel like your own concept, but the risk and time it took to get you to that point should be greatly reduced.
In time you will have grown a business that has become your own, paid down the original purchase price and built equity in the company that you can extract. When the time comes for you to sell, you’ll reap the reward of your initial investment at a multiple.
Buying a business can be a strategy to fast forward your entrepreneurial journey, but it’s not for everyone. Some deep self-discovery is important when setting your search criteria and understanding how the buying process works.