Buying an Established Business Vs A Start-up and Why?

Business Success in Manila: 16 Must-Know Tips

Some experts have predicted that a good portion of the workforce will be working in a self-employment capacity in the next decade; business ownership is becoming increasingly more appealing to many people.

Entrepreneurship and small business can be risky for the, however a great way to reduce some of that risk is to buy an established business which has already demonstrated an ability to successfully operate and generate profit! Of course business buyers must also look at educating themselves on the business buying process to ensure they buy the right business at the correct business value.

Obviously a successfully established business comes at a price and generally you would expect to pay more to buy a business than to start one from scratch.

Looking at the financial side for a moment – It is estimated that less than 10% of all start-up businesses are able to successfully secure the financing required at the outset. This is due to the high level of perceived risk start-ups pose to lenders because every aspect of the business is unproven and certainly not appealing to most lenders.

Depending on the type of business, certain lenders may provide some level of funding however, it will be dependent on a number of factors such as the cash flow, numbers, assets – stock and the security you personally have available to offer the bank.

So, more and more business owners realise the difficulty in financing a business purchase and are open to genuine buyers negotiating for some level of vendor finance, business owners are also looking at different ways to package and present their business, hopeful to attract the right buyer.

It is obvious when you compare buying an established business to starting your own your chances of success are still clearly best when the opportunity is established.