The dream of business ownership is alive and well today, especially in Colorado. By 2015, the state will be home to nearly 600,000 small businesses employing nearly 1,000,000 people! Every day you hear about starting a new business or a company moving its headquarters to Colorado. Business is good! So for today’s discussion, we thought it important to address the advantages of acquiring an established business over starting one.
In Colorado, 52% of small businesses fail within the first four years of their creation (from 2016). But this percentage decreases dramatically with the purchase of an established business for a number of factors that we will discuss below.
Proven business concept. Buying an established business is simply less risky than starting your own business. The concept has proven itself and can look back on a success story. This is also useful when it comes to financing the business, banks are much more willing to lend to a buyer with a proven concept than to finance a start-up company.
Established & recognized the brand. When buying an established business, there will already be a brand that is recognizable in the community and has a history and reputation behind it. It is much easier to market an established company for a community than it is to market a new company.
Local personnel. Hiring employees is time-consuming and costly and every cent counts in a start-up company! An established company has employees who have already been hired, trained and developed to run the business. These employees will not only help you make the transition to your own function but will also provide you with a more flexible schedule to focus on business strategies and family.
Customer base. An established company has had the time to build customer relationships and a loyal fan base. This means that the company benefits from revenue from the time of purchase. With a start-up company, the owner must work much harder to gain ground within the community and win customers.
Growth & Planning. Instead of working to make your start-up company profitable, as a new owner of an established business you can focus on scaling and strategic planning. This factor alone can reduce a large part of the risk and stress of a start-up company.
Choosing to buy a business brings you one step closer to achieving your business goals!
To learn more about how to buy a business or even how to buy a franchise, we invite you to visit our website for more information!
This article was written by the Managing Director of Transworld Business Advisors of Colorado. Transworld is the leading brokerage firm in Colorado. Its broker team has the largest and broadest selection of business offerings for sale, including over 100 offerings per year. Transworld Denver’s service area spans the state of Colorado and focuses on the Denver Metro, Boulder and Golden areas. They assist visionary entrepreneurs in buying or selling a business in Colorado and specialize in helping family businesses and related businesses with their strategic plans for the future.