You have decided to go into business. Then you can build a business from scratch or you can take over an existing business.
Taking over a business has advantages over starting a new one. For example, you are often immediately assured of regular customers, brand recognition and business premises. What are more advantages of a business acquisition compared to starting a new business? We list them for you.
Advantages of taking over versus starting:
- Taking over is more successful than starting: a lecturer in 'Business Transfer and Innovation' at the Hogeschool Utrecht has researched that buyers are more successful than starters; after 5 years about 95% of the buyers are still active compared to 50% of the starters. You are stepping onto a moving train when taking over a business. The business already has name recognition in the market, a customer base and revenue.
- With a business acquisition, before you start you already have a view of the operational status, finances, profit potential and risks of the business.
- Financing is easier to obtain because of past results. In addition, the seller is sometimes willing to leave part of the acquisition sum in the company and thus remain (financially) involved. This is an advantage for the buyer.
- Especially if the seller remains involved after the acquisition, you can benefit by using the knowledge, experience and network of the seller.
- You get off to a flying start because practical matters have already been arranged, such as a customer system, contracts or permits. It often takes some time before these matters are in order. When you take over, you can immediately use existing systems. (Note that permits can also be personal).
- When acquiring a business, you often have immediate access to a loyal customer base that is familiar with the products or services offered.
- Taking over a business can often be more cost-effective than starting a new business because many initial costs, such as product development and brand building, have already been incurred.
- A business acquisition usually offers the opportunity to benefit from well-trained and trained personnel who are familiar with the business processes and the industry.
- An existing business usually has a proven track record and solid reputation, which can make it less risky than starting an entirely new business.
- What about the dream of starting something new? If you buy a business, you can still pursue that dream. The condition, however, is that your idea fits the business's target market.
As you can see, buying a business offers several advantages. Discuss the possibilities with someone in your network. Make a business plan and list everything for yourself.
