Advantages of Buying an Existing Business

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1. Established.

An existing business is a known entity. It has an established and historical track record. It has a customer or client base, established vendors, and suppliers. It has a physical location and has furniture, fixtures, and equipment all in place.  The term “turnkey operation” is overused, but an existing business is just that with ALL these items in place and ready to go. For start-ups, you are starting from scratch and you need to ramp up and therefore the risk is higher.

2. Business Relationships. 

In addition to the existing relationships with customers or clients, vendors, and suppliers, most businesses also have experienced employees in place who are a valuable asset. Buyers may already have established relationships with banks, insurance companies, printers, advertisers, professional advisors, etc., but if not, the existing owner does have these relationships, and they can readily be transferred.

3. Not “A Pig in a Poke”. 

Starting a new business is just that: “a pig in a poke.” No matter how much research, time, and money are invested, there is still a big risk in starting a business from scratch.  The existing business has a financial track record and established policies and procedures. A prospective buyer can see the financial history of the business — when sales are the highest and lowest, what the real expenses of the business are, how much money an owner can make, etc. Also, in almost all cases, a seller is more than willing to stay on to teach and work with the new owner — sometimes free of charge.

4. Price and Terms.  

The seller has everything in place. The business is in operation and a price is established. Opening a new business from scratch can be the proverbial “money pit.”  When purchasing an established business, the buyer knows exactly what he or she is getting for his money. In most cases, the seller is also willing to take a reasonable down payment and then finance the balance of the purchase price.

5. The “Unwritten” Guarantee.

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.

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M&A Business Advisors represents sellers and buyers of privately owned businesses in a wide range of industries in California and Nevada. Our services include Selling a Business, Buying a Business, Mergers & Acquisitions, Business Sales and Acquisitions, Valuations, Opinion of Value, SBA Finance and Business Consulting. Sell your Business, Buy a Business, How do I determine the Value of a Business, How do I Sell my Business Confidentially, What is a Safe Way to Sell my Business, How long does it take to Sell a Business, How do I Sell a Business in California, How do I Sell a Business in Nevada, Search Businesses for sale. We represent Sellers and Buyers in Southern California, Los Angeles County, Orange County, Ventura County, Santa Barbara County, Kern County, San Bernardino County, Riverside County, San Diego County, Los Angeles, Torrance, Gardena, South Bay, San Fernando Valley, San Gabriel, Upland, Woodland Hills, Chatsworth, North Hollywood, Van Nuys, Burbank, Glendale, Pasadena, Santa Clarita, Palmdale, Thousand Oaks, Ventura, Camarillo, Newport Beach, Irvine, Anaheim, Brea, Northern California, San Jose, San Francisco, Oakland, San Ramon, Napa, Sacramento, Nevada, Northern Nevada, Southern Nevada, Reno, Carson City, Tahoe, Las Vegas.