In today’s economy few people feel secure, satisfied, fairly compensated and fully engaged in their current job. Companies no longer want life-time employees who stay with them for decades. Business is moving more quickly and more disrupters are entering the marketplace daily. All of these factors are contributing to the feeling of uncertainty and lack of control that are driving people to self-employment.
Once you make the decision to work for yourself what is the next step? You have to decide – do you want to start a business or purchase an existing business? Purchasing an existing business does offer many benefits. First and foremost is cash flow. An existing business offered for sale will have customers who spend money and create immediate cash flow for the new owner. A start-up does not; you need to factor in the initial losses and loss of income as part of the start-up expense.
An existing business also comes with an established set of policies and procedures. The business will have an “operating manual” and along with a good transition, you can be an instant expert. You can live on the existing business and gradually make changes as you gain experience. You also have employees who have the correct skills for their job and have some track record that you can review. An existing business also provides established vendor relationships and supply chains. Advertising campaigns have been tested and optimized, hours and service levels are established, and the physical space has been modified to fit the business.
Two other extremely important advantages that come with an existing business are access to capital and an established reputation. SBA has some truly amazing programs that allow you to finance the purchase of a successful small business with as little as 10% down payment. A business also has bank relationships that can transfer to the new owner. By purchasing a defined reputation you are saving a large amount of time and expense compared to starting from scratch.
Purchasing an existing business provides you with cash flow, policies and procedures, a customer base, employees, access to capital and an established reputation. That allows you to spend all of your time learning and growing the business. With your abilities, new energy and focus you will be able to grow your business, secure your future and have the feeling of accomplishment missing in most people’s work life.