- Established
For starters, the business has an established track record. It’s already been tested in the market and has a customer or client base. It also has pre-existing relationships with vendors, suppliers, a physical location and equipment in place. In short, it’s a “turnkey operation”. Everything is ready for you to take over and start running. You’re getting a lot more than just a name and a logo.
- Business Relationships.
You’ll also have access to experienced employees who are a valuable asset. And finally, you’ll be able to take advantage of the buyer’s existing relationships with banks, insurance companies, printers, advertisers, professional advisors, etc.
- Not “A Pig in a Poke”
No matter how much research you do, here’s always a chance that things won’t go according to plan. On the other hand, when you buy an existing business, you get to see the financial history of the company and learn from the experiences of the previous owners. In addition, most sellers are more than happy to stay on and help with the transition.
- Price and Terms
With an existing business, you know what you’re getting for your money. The seller has everything in place, including the business operation and a price that’s been established. Plus, the seller is often willing to take a reasonable down payment and finance the balance of the purchase price.
- The “Unwritten” Guarantee
It’s important to keep in mind that the seller is essentially guaranteeing your success. By financing the purchase price, the seller is saying that he or she is confident that the business will be able to pay its bills, support the new owner, plus make any required payments to the seller. This “unwritten” guarantee should definitely be one of your top considerations.