ENTREPRENEURSHIP THROUGH ACQUISITION
A Reliable Alternative To Chasing Unicorns
5 Reasons Why Buying an Existing Business is Better Than Starting One
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up. Take heed to these tips so that you're able to build your business portfolio.
Do You Want To Buy an Existing Business?
5 Reasons Why It is Better Than Starting One
There are a few reasons why buying an existing business is better than starting one. Use these tips to choose what's best for you.
Purchasing an existing business is one of the best entrepreneurship opportunities available for you to build wealth.
It already has employees who understand how to run the business. Also, your employees are everything because they're the ones that keep your business afloat.
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up.
Take heed to these tips so that you're able to build your business portfolio.
Branding is everything, and franchise opportunities are ripe for the picking today.
You can grow your wealth by buying an existing business, and it may have advantages that are greater than you'll enjoy by starting from scratch. If you're thinking about buying a company and want to know the benefits, consider the points below.
1. You're Taking Over a Company That Already Has Cashflow
Purchasing an existing business is one of the best entrepreneurship opportunities available for you to build wealth.
Generating income is always a process, and it can take years for a brand new company to become profitable. By stepping in and getting cash flow on the front end, you can strategize on how to grow the company, rather than just trying to how to make it survive.
2. Getting Your Hands on Financing is Much Easier
Lenders don't like risk.
When you buy a company that is already established, you dramatically reduce risk, and this makes you more attractive to financial institutions. You'll be able to get a loan with interest rate terms that are fair and affordable.
3. You Don't Have to Get it off the Ground to Begin Bringing in Income
When you're just launching a business, you'll have to spend a great deal of money on equipment, licenses, permits, branding, legal fees, and so much more.
Since you don't have to handle these sorts of expenditures, it frees up more money than you can re-invest into the business. This way you're focused on growth, rather than just trying to break even.
4. The Core Customers are Already in Place
You'll also have established customers to serve and market to when you buy a franchise.
It's much easier to expand on an established base that you have data on than trying to start from scratch. You're doing business with people that already trust your track record and understand the brand.
You'll also inherit all of the trademarks that the company has in place, along with all of the brand equity that comes with it.
5. It Already Has Employees Who Understand How to Run the Business
Your employees are everything because they're the ones that keep your business afloat.
When you buy a franchise, you're also getting access to employees that are used to running the business on a day-to-day basis, and they understand the policies. It's easier to add your own influence and add new policies, rather than building from the ground up.
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up. This lets you begin generating money on your terms.
Consider These Points When Buying an Existing Business
So there you have it. Buying a business can help you out in so many ways. Take heed to these tips so that you're able to build your business portfolio.
Consider these tips when buying an existing business, and don't hesitate to check out more of our posts on taking advantage of franchise opportunities.
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BUSINESS ACQUISITION
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to Buy a New Franchise When You Want to Own a Business
You don't have to struggle to buy a new franchise. Click here to use this guide to choose and purchase the best franchise for you. If you're trying to buy a new franchise, you'll need to seriously do some homework; it starts by doing your preliminary research into it to see if it's a viable option. Checking into the best location for a business is a necessity, especially if you are opening a franchise.
Want to Own a Business
Buy a Franchise
You don't have to struggle to buy a new franchise. You can use this guide to choose and purchase the best franchise for you. If you're trying to buy a new franchise, you'll need to seriously do some homework; it starts by doing your preliminary research into it to see if it's a viable option. Checking into the best location for a business is a necessity, especially if you are opening a franchise.
Buy a New Franchise on Your Terms
The potential for growth is abundant since you're getting the keys to a business that already has an established brand to piggyback on. However, you'll need to make sure you're handling this franchise purchase with some intact strategy.
Consider these points so you handle the deal accordingly.
1. Thoroughly Research the Franchise and Its Viability
If you're trying to buy a new franchise, it starts by doing your preliminary research into it to see if it's a viable option.
Since your individual franchise is a micro success of the larger company, you'll need to research the brand as a whole. Pre-screen the franchise and figure out how lucrative this purchase can be, and how much you should be paying for the opportunity.
2. Scope Out the Best Location
Checking into the best location for a business is a necessity, especially if you are opening a franchise.
You'll want to open the franchise in a thriving city with room for growth, while also choosing a location that is in a neighborhood or district that gets plenty of traffic. In addition to researching the demographics of different locations, check with the local Chamber of Commerce for more resources and advice.
3. Be Sure You Pass the Prerequisite Requirements
Buying a franchise requires you to apply with the company selling it. This means understanding their prerequisite requirements, such as credit score, business plan, net worth, and business experience.
Having these details in line upfront will help you keep your application on track.
4. Hire a Legal Team to Assist With Negotiation and Preliminary Paperwork
You owe it to yourself to put together a team of pros that can assist you with securing the business. Start with talking to some accountants and lawyers.
A business lawyer can cost you about $150 per hour and will be worth it when it comes to negotiating and handling preliminary matters.
This way, you'll have resources at your disposal to make sure your application is handled properly and will comb through your finances to ensure that you're making the best decision.
5. Handle the Application, Understand the Agreement and Get Financing
Finally, take your time and go through the process of filling out your application.
As your application rolls along, start to keep copies of everything from purchase agreements to rezoning permits. You'll also need to reach out to finance companies that can help you with a loan when you need it. That way you're able to complete the purchase of the franchise as soon as the application is approved.
Buy a New Franchise on Your Terms
If you are trying to buy a new franchise, these are the five tips that you'll need to bear in mind. This can be a lucrative enterprise that helps you round out your portfolio with a strong earner.
Check out this guide for buying a new franchise and don't hesitate to reach out to us for further help.
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BUSINESS ACQUISITION
How to Buy a Business: Best Practices for Buying a New Franchise Opportunity
How to buy a franchise business: Are you interested in buying into a franchise? With the system and procedures, it seems challenging. Business owners prefer franchising because you are inheriting an established brand. Moreover, a franchise has a proven business model. Like any business, it is important to select a franchise that you are passionate about.
How to Buy a Franchise
Best practice guide
How to buy a franchise business: Are you interested in buying into a franchise? With the system and procedures, it seems challenging. Business owners prefer franchising because you are inheriting an established brand. Moreover, a franchise has a proven business model. Like any business, it is important to select a franchise that you are passionate about.
Franchise opportunities under consideration should mesh with your past business experience and acquired skills. It is not cheap to buy a franchise and significant capital is required. This leaves prospective franchise owners searching for financing options. Buying a franchise is not particularly easy and sometimes professional assistance is required. Business owners are able to quickly leverage off the franchise's brand and product line.
Here is how to buy a franchise:
Franchising remains a great business opportunity in 2019. In fact, there are nearly 760,000 franchise establishments in the United States.
Business owners prefer franchising because you are inheriting an established brand. Moreover, a franchise has a proven business model. You can review actual sales and profit data to verify that the concept is growing rapidly.
Read on to learn how to buy a business. Explore this comprehensive guide on buying franchises including topics such as financing, research, and getting a good deal.
Find a Franchise Opportunity You Are Passionate About
The first step in buying a franchise is identifying the right opportunity. Like any business, it is important to select a franchise that you are passionate about.
Start off by considering industries that you are familiar with and understand how they operate. Also, franchise opportunities under consideration should mesh with your past business experience and acquired skills.
Franchise Analysis
Before you invest in a franchise, substantial analysis is required. Of course, you want to look at sales data and what profit margin is realized. There are many other business indicators to evaluate.
What are the startup costs and franchise fee? What type of operating expenses does the franchise have? Are there any additional fees such as royalties or advertising costs?
This all falls into the category of performing a comprehensive cost-benefit analysis. There are other factors to consider in a franchise analysis.
Perhaps one of the most important factors is the location of your prospective franchise. This is so critical because not all locations are considered equal.
Each geographic location comes with its own set of state and local taxes. There are also state wage laws to consider, as well as rent and population density.
Financing Options
It is not cheap to buy a franchise and significant capital is required. On average, initial franchise fees range from $20,000 to $35,000. Depending on the brand, it could cost upwards of $100,000.
Not many entrepreneurs have that type of cash lying around. This leaves prospective franchise owners searching for financing options.
Some opt to apply for a bank or Small Business Administration (SBA) loan. Others use their retirement savings using a mechanism called a rollover for business startups (ROBS).
ROBS allows you to withdraw retirement savings from your 401k, IRA, etc. without penalties or taxes. Lastly, some franchisor offer financing options.
Professional Assistance
At this point, you may be feeling overwhelmed. Buying a franchise is not particularly easy and sometimes professional assistance is required.
There are subject matter experts available for franchising placement and finding the right opportunities. They perform in-depth analysis such as reviewing the franchise’s financial health. Among many other services, they also evaluate the Financial Disclosure Document (FDD) and Franchise Agreement.
A Recap of How to Buy a Business
There are many reasons why entrepreneurs choose to buy a franchise. Business owners are able to quickly leverage off the franchise’s brand and product line.
However, the franchise acquisition process is littered with landmines and complexities. A professional service company can ensure that you make a sound investment. If you want to learn more about how to buy a business, log in today.
Financing the Purchase of an Existing Business: Different Financing Methods to Know
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. If you are looking into buying a business on your terms, you'll need to explore all options in front of you. If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. Financing the purchase of an existing business is a strategic move that you need to carefully consider.
Buy A Business Through Financing
Have A Look At Different Financing Methods
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. If you are looking into buying a business on your terms, you'll need to explore all options in front of you. If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. Financing the purchase of an existing business is a strategic move that you need to carefully consider.
It's important that you take the proper steps when you are looking to acquire a business.
As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it.
Follow these tips to see which form of financing suits you.
1. Ramp Up Your Own Funds to Allocate
When someone is looking to sell a business, there are countless arrangements that come into play.
The best thing you can do for yourself is to put up your own money if you have it. This way, you call the shots and aren't worrying about crazy interest rates or strict terms.
It's always best to have a nest egg set aside, and you can use this nest egg to your benefit when you decide to allocate some of your own money to acquire a business.
2. Find a Traditional Bank Loan
If you are looking into buying a business on your terms, you'll need to explore all options in front of you.
Getting a traditional bank loan is still an incredible option. Reach out to either a big bank, community bank or credit union to see what sort of loan options you can explore.
Make sure that they are feasible for your budget and that the terms are beneficial to your needs.
3. Talk to the Small Business Association
Be sure that you look into the Small Business Association (SBA) as an outlet when you'd like to get some lending.
These organizations are allies for small businesses such as your own and can help you get your hands on the funding that makes the most sense.
They'll give you access to the financing options that are most conducive to growth so that you are able to expand your business.
4. Use Your 401k to Roll Money Over
You can use your 401k as a tool to fund a business.
If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. The benefit of using a 401k is that you'll be able to do so without the same early withdrawal penalties that you would experience when taking the money out for other reasons.
5. Get Financing Through the Seller
Finally, it also pays to seek financing from the seller.
A number of sellers will offer you ongoing financing at a great rate, which can expedite the sale of the business. Be sure to thoroughly read through the terms to know what you are getting.
Financing the Purchase of an Existing Business: Use These Tips
Financing the purchase of an existing business is a strategic move that you need to carefully consider. If you're in the market for buying a new business, let these tips guide you.
Our company can help you out so that you can find the assistance that you need.
For more information on buying a business on your terms, stay tuned and get in touch with us for more help.
Financing the Purchase of an Existing Business: Different Financing Methods to Know
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business. It's important that you take the proper steps when you are looking to acquire a business. As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it. Follow these tips to see which form of financing suits you.
Do you want to purchase a business but don't have the money for business acquisition? Here's all about financing the purchase of an existing business.
It's important that you take the proper steps when you are looking to acquire a business.
As such, you'll need to learn the ins and outs of financing the purchase of an existing business on your terms. Thankfully, there are lots of ways you can go about it.
Follow these tips to see which form of financing suits you.
1. Ramp Up Your Own Funds to Allocate
When someone is looking to sell a business, there are countless arrangements that come into play.
The best thing you can do for yourself is to put up your own money if you have it. This way, you call the shots and aren't worrying about crazy interest rates or strict terms.
It's always best to have a nest egg set aside, and you can use this nest egg to your benefit when you decide to allocate some of your own money to acquire a business.
2. Find a Traditional Bank Loan
If you are looking into buying a business on your terms, you'll need to explore all options in front of you.
Getting a traditional bank loan is still an incredible option. Reach out to either a big bank, community bank or credit union to see what sort of loan options you can explore.
Make sure that they are feasible for your budget and that the terms are beneficial to your needs.
3. Talk to the Small Business Association
Be sure that you look into the Small Business Association (SBA) as an outlet when you'd like to get some lending.
These organizations are allies for small businesses such as your own and can help you get your hands on the funding that makes the most sense.
They'll give you access to the financing options that are most conducive to growth so that you are able to expand your business.
4. Use Your 401k to Roll Money Over
You can use your 401k as a tool to fund a business.
If you have been building your retirement money over the years, this can be a great outlet for acquiring a business. The benefit of using a 401k is that you'll be able to do so without the same early withdrawal penalties that you would experience when taking the money out for other reasons.
5. Get Financing Through the Seller
Finally, it also pays to seek financing from the seller.
A number of sellers will offer you ongoing financing at a great rate, which can expedite the sale of the business. Be sure to thoroughly read through the terms to know what you are getting.
Financing the Purchase of an Existing Business: Use These Tips
Financing the purchase of an existing business is a strategic move that you need to carefully consider. If you're in the market for buying a new business, let these tips guide you.
Our company can help you out so that you can find the assistance that you need.
For more information on buying a business on your terms, stay tuned and get in touch with us for more help.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.