by John Louie Ramos

Created on: July 31, 2011   Last Updated: August 01, 2011

Due to the onset of globalization, the world has transformed into a huge global marketplace. The business environment, both in the United States and elsewhere, has become fiercer and more competitive. Hence, starting a new business from scratch is a lot harder now than ever.

Fortunately, aspiring entrepreneurs can easily enter the field of business by just buying a new business. While most “born-entrepreneurs” don’t like the idea, such is happening in the real world. The saying “if, you can’t beat them, join them” rings true in today’s business environment.

Buying an existing business offers a lot of distinct advantages including the four listed below.

1) Existing businesses are usually sold lower than their real market value

Founders usually sell their existing businesses at a price lower than its real market value. The package deal for businesses will only normally include the inventories, receivables and the fair market value of the furniture and fixtures, equipments, tools and machineries the existing business owns.

 Some of the other costs like the cost of hiring employees, the cost of acquiring a customer and the cost of developing a unique market formula or product aren’t usually included in the selling price of an existing business.

2) Readily-available plans and market research findings

Another advantage of buying an existing business oppose to starting a new business from scratch is that existing businesses already have written business plans and strategies that the new owner can use or implement.

Similarly, existing businesses have already done lots of research regarding the market. They already know or at least; they already have an idea of what the customers want. Existing businesses might have already established competitive advantages over its competitors.

3) Established goodwill, existing clients and customer relationships

One of the main advantages of buying an existing business is the advantage of buying established goodwill. A new business will have a harder time in building a customer and business relationships. On the other hand, buying an existing business will save you time, money and energy in establishing a connection with customers, suppliers and professional networks.

4) Experienced managers, staff and employees

Buying an existing business will also give you the benefit of having a more experienced workforce. The existing employees are better experienced and are learned when it comes to the nature of the business. Moreover, you can enjoy the advantage of having them on board instead of hiring new and inexperienced workers.

Learn more about this author, John Louie Ramos.
Click here to send this author comments or questions.