Chapter 3: Buying an Existing Business

Why Start from Scratch When You Can Buy?

We often hear that six out of every ten new businesses fail during the first five years. It takes a new business between five and eight years to prove that the concept, market, prices, and management are successful. Starting a new venture is a journey through the unknown that involves a high degree of uncertainty. Entrepreneurs are finding out that buying an existing business is different and can be profitable from the first day. Also, there are big returns in the buying and revitalization of existing businesses, even with companies that are distressed. Buying the right business reduces the time involved in planning, organizing, and launching a new venture. In buying an existing business, the entrepreneur is buying reputation, customer base, suppliers, equipment, lease, and cash flow. Also already in place is the management team. Entrepreneurs who buy existing businesses are not creators of new ideas, rather good turnaround managers; they recognize good business opportunities and make an existing business more profitable. By buying an existing business, the entrepreneur inherits all the problems and headaches that someone else has caused............

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