5 Good Reasons to Buy a Small Business Today


If you’re looking to become an entrepreneur, starting a company from scratch isn’t the only way to go. From online stores to bakeries and various other goods and services providers, there is no end to the number of small businesses available for sale today.

There are also just as many good reasons to choose to buy a small business instead of starting one from scratch. Here are some of the strongest arguments in favor of choosing that route.

1 – Smaller risk

According to the US Bureau of Labor Statistics, around 50% of businesses fail within the first five years. You can avoid that risk — as well as many other risks associated with starting a new business — by buying one that already has a successful business model and established clientele.

This does not mean that there are no risks in buying a business. You’ll still need to choose carefully and perform your due diligence with the help of a business law and acquisition attorney, as this page shows. But the risk is still significantly smaller than that of starting a business from scratch.

2 – Hit the ground running

It usually takes months or even years for a new venture to start turning a profit. That’s one of the reasons why starting from scratch is so risky — you may find yourself burning through your financing and savings without knowing for sure if you’ll ever get that money back.

That’s much less of an issue when buying a profitable business. You can get it today and start using the profit from the business to recoup your investment right away.

3 – Access more financing

Banks and other sources of finance are also interested in reducing risk. When they lend you money, they want to make sure they’ll be able to get that money back. And in that regard, investing in someone who is going to buy a business is much safer than investing in someone who is looking to start one.

The result is that it is often much easier to secure financing when trying to buy an existing business. Granted, that reduced risk is often balanced out by the fact that buying a business is more expensive than starting a new one. But if you have the credit score and the assets needed to take out a sizable loan, this reduced risk can lead to lower interest rates.

4 – Support the community

If you’re buying a small local store or a niche online store, you’ll also be buying your way into becoming a fixture of that community. This gives you access to a reliable customer base, and it can also be a way to meet new people and expand your network.

Depending on why the business was being sold, buying it may also prevent it from being closed. Which is something current customers are sure to appreciate.

5 – Start with a good team

If you’re able to retain talent after the purchase, you’ll have an experienced team to help you run the business. And any entrepreneur knows the value of veteran employees who are familiar with the ins and outs of both the business and the industry at large.

Hopefully, you’ll also be able to build and maintain a relationship with the previous owner. That will give you access to a mentor who should be able to provide valuable insight going forward.