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The way we work has shifted dramatically since the COVID-19 pandemic. Many of us were forced to reevaluate our careers and think long and hard about where our finances were coming from. It made us realize that we had to create our own opportunities, and that often took the form of gig work or starting a side business. At a time when we didn’t have much to fall back on, entrepreneurship meant we could at least depend on ourselves.
As younger Millennials and the Gen Z population began to make their way out of school and into the workforce, they also brought about a cultural shift that defied the idea of the traditional corporate job. The “dream” of sitting in an office cubicle from 9 to 5 quickly faded as these new workers craved purpose and freedom. In turn, entrepreneurship came as a natural decision for many.
But while most entrepreneurs knuckle down and come up with new business ideas from scratch, a few take a different route and choose to buy an already established business instead. In a society where launching a startup is revered, people often overlook the advantages of purchasing a business. Here are several reasons why it could be the smarter choice.
It Has an Immediate Customer Base
Taking over an existing business means inheriting every other aspect of it as well, including its customers. Building a customer base, particularly one that trusts and is loyal to your business, is one of the most difficult yet important parts of starting a business from scratch. It takes months or even years of effort to use the right marketing techniques and customer acquisition tactics, and a lot of hope that this exposure will catch eyes.
Established businesses that are up and running and doing well already have a customer base that knows and trusts the brand. Rather than wondering whether customers will bite, you can focus on the existing customers and how you can nurture those valuable relationships.
It Has Existing Resources and (Possibly) a Workforce
Gathering and purchasing resources from the ground up isn’t an enjoyable process. We’re talking absolutely everything, from inventory and equipment to software and potentially even physical office or store space. The initial investment into those items that are key to operations isn’t cheap, which is why existing businesses have a leg up over startups in this regard. It’s a lot like taking advantage of bonuses with no wagering requirements—there’s a lot less money and effort you need to put into building those resources from the ground up.
Beyond the physical assets, you also get to adopt a workforce that knows exactly how to use those existing resources. Everyone knows that hiring and onboarding is neither a fast nor affordable feat, but add in the need to establish a strong company culture, and you’ve got a big challenge on your hands. An existing business will have a proven company ethos, values, work environment, and approaches to management, employee recognition, and communication with their workers. These employees are already familiar with all the processes, the regular customers, and what the company stands for.
It Has an Established Market Presence
Just about every market is saturated nowadays, thanks to technology lowering the barrier to entry, the globalization of business, and the advent of digital marketing. That alone makes it hard to gain any sort of market presence, making efforts feel like waving for help in a vast ocean in the middle of nowhere. When you buy a business, however, it has already found a niche and gotten over the hurdles of early competition. It’s put in the legwork needed to truly stand strong in the market, and in response, the clientele has followed suit.
Even if their reputation isn’t “glowing” per se, a positive status can be simply built upon. Not only do customers trust the brand, but so do other stakeholders like suppliers, distributors, and collaborators. This makes it much easier to expand the business and foster new relationships if needed.
It Has an Existing Business Model
While creativity and excellent customer service are all great qualities, running a successful business ultimately requires you to bring home the bacon. Business models are complex and vast, and there’s usually a lot of trial and error involved before you hit the bullseye. Although this experimentation is extremely useful, it will cost you time and money. Business model testing includes evaluating all facets of the business, including pricing structure, customer service approaches, operations, paid and organic advertising, and more.
With an established business, the formula is already developed for it, with best practices for all the day-to-day goings-on, optimized systems, tested sales channels, and a proven framework that you can rely on.
It Comes With Lower Risk
Let’s not sugarcoat it—starting your own business can be riveting and feel like an ambitious undertaking with lots of rewards on the horizon, but the truth is, it’s hard work. Nothing about entrepreneurship is easy, and it comes with far too many unknowns to count. Will the idea even pan out as you hope? How will customers respond? Are you going to get a return on investment? All these questions get thrown out the window when you purchase an established business because you already know that the business has proven its viability.
It Provides the Opportunity for Faster Growth
And with all these must-have components thriving and ready to go, you can focus on the next best thing—growth. With this head start, you’ll likely be able to scale a lot more quickly than other entrepreneurs who have chosen to start from scratch.
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