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Reasons young entrepreneurs should buy a business, not start one

On Behalf of | Dec 20, 2016 | Business Formation |

So you want to be a business owner. It’s always been your dream and you’re finally ready to start. Thinking that means you have to start from the ground and build your way toward success? You can, but you don’t have to. In fact, many experts believe you’re best off to buy a company instead. Below are four key reasons why. 

1. You already have a client base.

If you start a business, the first hurdle is simple: letting people know you exist. You may not have a single sale the first month. You have no customers. Buying a company gives you a customer or client base. That shifts and grows as you take over, but you start with an income, rather than with nothing.

2. Investors can see the track record.

Yes, you may have to borrow more money to buy a company that’s already running than to buy a building and start one, but funding is going to be huge either way. If you have nothing, investors worry about loaning you any cash. All they have is your word that it’s going to work. If you buy a company that exists, they see a proven track record, sales numbers, and much else. That can influence them to give you money they wouldn’t have given otherwise.

3. Your employees are already trained.

The processes are in place. You have the equipment. Best of all, you have employees who can do the job. When you buy, you step into a situation where the company runs at full force on day one. You’re not spending valuable time trying to train workers. You can refine the process and the workforce as you go, but there’s far less build-up. You get an experienced crew that is already used to the necessary production levels and has proven it can get the job done.

4. You can buy patents and copyrights.

Some of the greatest value in buying a company may come in buying the patents that company holds. You can’t make these copyrighted products on your own. By legally taking over, you acquire the rights, and you can then make alterations, ramp up production, or tinker with the company to fill the potential market that you see in a way you never could if you were trying to hit that market on your own.

Naturally, it’s crucial to know exactly how the buying process works from start to finish. It can be far more complicated that starting a company, especially when you start talking about legally acquiring patents and other protected information. Always make sure you know what is best for you and your vision for the company, and then look into the legal steps needed to make that a reality.