Buying a business | Finding the right business for you | 3 min read

Why buy an existing small business?

Last updated: October 11, 2018

There are pros and cons to every method of becoming your own boss – whether you start something from scratch, get into a franchise, or buy an existing small business. However, as you do your research you’ll probably find that you can greatly minimise risk by purchasing an established business.

So what are the benefits of buying an existing small business?

Easy finance

Having a proven track record makes it easier to get finance. Most lenders are more inclined to finance an established business, rather than a start-up. This is because they generally incur less risk lending money to a business that has already had some success, and has existing cash flow.

Proven concept

Getting systems in place is often one of the most difficult things about being your own boss. However, when you purchase an established business, you’re also inheriting their methods, equipment and supplies. The original owner has already worked out the location, store fit out, advertising, prices, suppliers, competitors and other variables – meaning you can worry about more important things, and drive your business to success.If you are buying a prosperous business, you might not need to change much about the way things are run. When operations are already effective, you’ll only need to tweak things as needed to make them even more efficient, rather than do all the groundwork.

Cash flow

Having income from day one is a huge benefit of purchasing an existing business. Compared with a new business or start-up, established businesses have already been through their start-up phase – shelling out money for equipment, fixtures, training and a long list of other setup costs, all while generating no income. This period can be really tricky for new business owners, but can be almost completely bypassed when investing in a successful, existing business.


One of the most beneficial aspects of buying an existing business is the people that come with it.Along with all the systems and equipment, you also acquire customers. Having instant customer access is a huge jump-start to any business owner, and means you can focus on growing your existing base of clients, rather than building it from scratch.Another major people-based asset you inherit is staff. Often a business will come with employees who are willing to stay on and help you learn the business. With well-trained people who know the ropes already in place, you can concentrate on the bigger picture rather than every day details, and increase your chances of success. With a great team, just about anything is possible.

Minimised risk

Investing in an existing small business with a proven concept helps to reduce your overall risk, eliminate start-up problems, and saves you time and money.If the business has been fully tried and tested, you know what you’re walking into, and with almost everything already in place, you don’t need to do all the groundwork yourself.The business plan and records that are already in place can enable you to more easily forecast short and long term profits, and make other key business decisions. Not only do you have the previous success of the business to use to your advantage, you also benefit from the experience of the original owner, who can provide you valuable insights on running the business and help set you up for success.

While business ownership always involves risk, when you buy an existing business you are taking a more calculated risk, and removing many of the pitfalls and failures that start-ups face.

Want to find out the benefits of franchising?  Check out this article – Top 10 reasons to buy a franchise.

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