The Business of Buying a Business
Buying Businesses:
Owning and operating one’s own business can be financially rewarding and gratifying, but business ownership is not for everyone. It requires a high level of dedication and business abilities.
Owners and operators small businesses comprise the core of the American Business System. The majority of businesses in the United States are “Small Businesses”. According to the Small Business Administration (SBA), a small business is one a business valued under $500,000. Statistics show that 85% of these businesses will be offered for sale at one point, 5% will be turned over to the second generation, 1% will be turned over to the third generation and most businesses are offered for sale because the owner is retiring.
Owners and operators small businesses comprise the core of the American Business System. The majority of businesses in the United States are “Small Businesses”. According to the Small Business Administration (SBA), a small business is one a business valued under $500,000. Statistics show that 85% of these businesses will be offered for sale at one point, 5% will be turned over to the second generation, 1% will be turned over to the third generation and most businesses are offered for sale because the owner is retiring.


Benefits of Buying an Established Business:
- Immediate cash flow.
- Can see results rather than projections.
- Established supplies, customers and procedures.
- Established credit lines.
- Proven business, proven product at a proven location.
- Knowledgeable employees.
- Availability of Seller financing.
- Third party financing easier to obtain.
- Seller’s commitment to provide training to the buyer.
- 90% of start-up businesses fail within the first 5 years,
- Only 20% of purchased businesses fail within the same time period.
Benefits of Buying a Franchise:
A franchise allows the franchisee to be in business for himself without being by himself. A good franchise should offer a proven product or service, preferably with name recognition. The franchise company should also provide organizational assistance plus proven systems and procedures to operate and manage the business and most importantly, ongoing support. Franchise are not suited for every business owner, there are advantages and disadvantages that should be considered.
