How To Buy A Business
At Tucson Business Investments we offer buyer broker services as well as seller representation. Our licensed agents can not only show you what businesses are currently on the market but we can also search out and find businesses that fit your specific criteria. Many times buying a business that is not "On the Market" can be a great advantage to the buyer as you are not competing with other bidders. TBI can make this happen. Please call us to schedule an appointment today. 520-750-1764.
The advantages of buying an existing business rather then starting a new business from scratch are many:
1. Cash Flow: When you buy an existing business you have income from the first day you are the owner. When starting a new business it will take you months if not years just to break even during which time you will need to continually support the business financially in addition to your initial investment. This is why so many new businesses fail. Even a great idea takes a long time to catch on, if it ever does.
2. Brand Recognition and Reputation: Businesses have spent years building a reputation that took countless amounts of work and capital. This includes the trade name, phone number, web site, supplier and industry relationships and so on. As a buyer of an existing business you get the benefit of all the hard work and effort of the previous owner.
3. Established Clientele: What's a business without customers? Nothing! The main goal of every business is to add more customers while maintaining the ones you already have. How much easier is the job of the owner when you start with hundreds or thousands of already established customers? That is an advantage that really can not be measured.
4. Systems Already in Place: Where do you get that material? How exactly does that work? Who's job is it to complete that task and how long will it take, how much will it cost and what can we do to improve it? These questions are examples of intangible knowledge and expertise that can only be gained by years of experience and trial and error. By buying an existing business you are basically assuming the previous owner's knowledge, expertise and employee relationships that you can leverage in to a growing and successful enterprise.
5. Potential for Growth: One problem some established business operators have is a lack of motivation to grow their business. Most often they have already been financially successful and they are comfortable with where they are. This is the perfect spot for a new owner with new energy and enthusiasm to take over and take advantage of all the opportunities the previous owner wasn't. Add new products and services, expand to new markets or update the company's profile and web site. Take what has been established in the past and grow it towards the future.
6. Financing: Business loans are more difficult now than they have ever been and they are even more difficult for start-ups. We structure many deals with a seller carry-back to allow buyers to purchase a business with a smaller down payment. This allows buyers to purchase a business with less money down and then by operating the business they pay off the balance of the purchase price. Most often it is a win-win situation for the buyer (who is now able to purchase a business with a smaller investment) and for the seller (who gets the down payment and monthly income with some interest).
Buying a business can be a great investment for an energetic buyer because you are truly in control of your own destiny. You are the boss and you are able to work harder and smarter than the competition. You control how successful you will become. For many people, this is the most attractive reason to buy a business.