As the COVID-19 pandemic wanes and the world slowly reopens from a long-forced slumber, right now may be the best time in years to start a business.
While the pandemic forced a number of smaller businesses to close, it has created an opening for new opportunities that, if you move quickly – and are helped along by a business broker like MBB – you can take full advantage of.
If you are looking to start a new business, however, it can be hard to decide the best path. Is it better to start fresh, or should you look for a chance to take over an existing operation? There are a number of reasons why taking the reins of a previously existing business may be the best option. Here are 5 of these reasons:
Brand power is one of the most important parts of a business; when it is done properly, it can instantly tell potential clients what your business is and what they can expect. By taking over a previously existing business, you gain the addition of already recognizable branding and the cost-saving measure of not having to create all imagery and advertising information from scratch. Of course, this is only a plus if the business you are taking over is well respected, which brings us to the second point…
Pre-Built Customer Base
The value of a good customer base that is already established and loyal to the business cannot be understated. The cost and time it takes to build a solid customer base in a new business can be overwhelming.
By taking over a pre-existing business, you have an instant customer base that you can rely on in the beginning.
It is up to you to do the work required to keep and grow that customer base, but when you DON’T have to start from scratch it can take away a lot of the stress that comes from opening a new business.
The scariest thing during the early days of a new business is the emptiness that comes from having to start at zero. Building a customer base from scratch means that you will likely be looking at a rough few months, or even years, as you work to ensure your clientele that your business is a place they want to give their money to.
Gaining A Trained Staff
One of the hardest parts of starting a business is the creation of the daily routine and building a reliable staff. Depending on the business you start, you may not have a large staff working under you, or any staff at all, but if you do, you want a staff that is dependable and knows how to get things done.
By taking over a pre-existing business, you can also take on the pre-existing staff. This will not only help make sure things run smoothly from day one, and it can help you keep the client base of the previous owner. Of course, you shouldn’t expect all of the staff to stay on, and there will likely be staff members you choose to let go, but as long as you work to keep things open and honest with the existing staff, there should be little to no internal problems.
An Easier Path to Success
According to the Small Business Administration, 1 in 12 small businesses will shut down every year, and roughly half of all small businesses close their doors within the first five years.
These numbers can be truly frightening when starting a new business; the amount of blood, sweat, and tears it takes to get your business off the ground aren’t the kind of blood, sweat, and tears you want to see vanish after just a few years. The goal is to create a successful and sustainable business that you can hand down to the next generation of your family or sell-off when you are ready to retire, and having a 50-50 shot at losing it all in half a decade can be hard to deal with.
But by taking over a pre-existing business with a good track record, you can do away with the fear of the first five years. By purchasing a pre-existing entity, you gain the security of all the points mentioned above and so much more, including improved financing options because of the pre-established revenue stream of your company in case you wish to remodel your space or create a larger marketing push to announce the new ownership. You also have supply chains for products already set in place and an understanding of what your community needs and wants, thanks to the work of the people from who you purchased the business.
All of this means you have a greater chance at success than you would if you were starting your business from scratch, and at the end of the day, you want the numbers to be on your side, don’t you?
Clearly, it’s attractive to purchase an existing business, but it’s difficult if you don’t have people by your side to help you make the purchase. Contacting a business broker can help make the entire process a breeze.
Need to find one such business broker? That’s where we come in. At Michigan Business Broker, we have the experience and skills to make sure you have everything you need to succeed as a business buyer. Together, we can find the perfect fit for what you want and get your business up and running.
Call us at (248) 220-3274 or look at the business listings we currently have on hand to see what might be a fit for you.