6 Benefits of Buying an Existing Business

The Hub

Buying a Business - Business Insights

6 Benefits of Buying an Existing Business

While many people overlook the option of buying an existing business, it can actually make the process of starting a new enterprise much easier. In this article we look at the six key benefits of buying an existing business, along with some challenges to consider.

If you are considering starting a business, you have two options: starting from scratch or buying an existing business.

6 Benefits of Buying an Existing Business

6 Benefits of Buying an Existing Business

1. The business is already up and running

When starting a business from scratch, you need to invest significant time and effort into various aspects such as market research, sales planning, and competitive analysis. By purchasing an existing business, you save yourself the trouble of building everything from scratch. The business is already operational, allowing you to implement changes and directions without worrying about the basics.

2. Established customer base  

Attracting customers is a significant challenge for any new business. When you buy an existing business, you inherit an established customer base. Whether you’re running a fish and chip shop or a law firm, having existing customers in place provides a solid foundation for your business. While the business may be new to you, it’s already part of your customers’ everyday lives, increasing the likelihood of their continued loyalty. This stability allows you to focus on expansion without the pressure of meeting minimum numbers to stay financially afloat.

3. Experienced employees

The staff of any company is a valuable asset. When you buy an existing business, you also acquire a team with firsthand experience in the business. These employees can ensure smooth operations and provide insights into what has worked in the past and what hasn’t. Building a positive relationship with them can make them your most trustworthy source of information when you have doubts. In some cases, the previous owner may even stay on to guide you through the transition, putting you on a fast track to success.

4. Existing contracts and partnerships

Many established businesses have a track record of partnerships and clients they have worked with in the past. Starting from scratch would require you to build those contacts and secure contracts on your own, which can be challenging when you’re a new establishment without credentials or testimonials. Buying an existing business grants you access to these existing contracts and relationships, giving you a head start in the industry.

5. Learn from past strategies

Purchasing an existing business allows you to review previous accounts and gain insights into past strategies. You can estimate future figures and decide how to move forward based on what has already been implemented. This information is valuable for improving the business’s future performance. Additionally, learning from any mistakes the previous owners made can help you avoid similar pitfalls, saving you the stress of making them yourself.

6. Quicker results

If you’re starting a business, chances are you’ve already developed a strategy. By buying an existing business, you can focus on implementing that strategy while seeing results sooner. As a new owner, you bring a fresh perspective that can quickly identify the business’s strengths and weaknesses. With a combination of the existing track record and your novelty, you’ll see results much faster compared to starting from scratch.

Considering starting a business?

Register your interest here

Challenges to Consider

While buying an existing business offers numerous benefits, it’s important to acknowledge and address potential challenges:

1. Initial investment

Buying an existing business typically requires a substantial upfront investment. You need to carefully evaluate the financial aspects and ensure you have adequate funds to acquire the business and cover any additional expenses.

2. Employee resistance

Current employees may be apprehensive about a change in ownership. It’s crucial to communicate your plans transparently and build positive relationships with the staff to alleviate any concerns. Their experience and support can be invaluable during the transition.

3. Honouring contracts

When purchasing an existing business, you may have to honour any outstanding contracts the previous owner had. Reviewing these contracts thoroughly is essential to ensure you can meet the obligations and maintain positive relationships with clients or partners.

4. Reputation management

In some cases, the previous owner may have left a negative reputation for the business. It’s crucial to address any negative perceptions and work towards rebuilding the reputation. Implementing strong customer service and marketing strategies can help overcome any lingering doubts.

By proactively addressing these challenges and tailoring your plans to the specific business you’re buying, you can mitigate potential risks and set yourself up for success. Remember, your acquired business is waiting for you to take the next steps towards a prosperous future.

Speak to the team

    Feefo Exceptional Service

    Recently sold businesses

    • 1

      New and used motorbike dealer

      Oxfordshire

      POA

      Discover Business
    • 1

      Catering supplier

      Nottinghamshire

      POA

      Discover Business
    • 10

      Licensed Cattery 107 Cats With Accommodation

      Haywards Heath, West Sussex

      £1,300,000

      Discover Business
    • 1

      Precision Engineers, Merseyside

      Merseyside

      £1,092,132

      Discover Business
    • 3

      Busy Metal Fabrication Business in Rainham, Greater London For Sale

      Rainham, Havering

      £1,050,000 +SAV

      Discover Business
    • 3

      Freehold Furniture Sales With Development Opportunity

      Chatham, Kent

      £995,000 +SAV

      Discover Business
    • 1

      Precision Engineering Business in the West Midlands For Sale

      West Midlands

      £950,000 +SAV

      Discover Business
    • 4

      Popular Caravan/Camping Park in Blackford Near Carlisle For Sale

      Carlisle, Cumbria

      £949,950 +SAV

      Discover Business
    • 1

      Well Respected Fire Safety & Security Business

      Hampshire

      £910,000 +SAV

      Discover Business

    Speak to the team

      Feefo Exceptional Service