Buying a Business

9 Advantages to Purchasing an Existing Business

Are you ready to become an entrepreneur and take control of your own destiny? Purchasing an existing business is a great way to do just that, providing the opportunity to establish yourself in the market while avoiding all the headaches associated with starting from scratch. 

With a wide range of advantages, purchasing an existing enterprise can be the perfect first step toward success—all it takes is finding the right fit for you! In this guide, we'll discuss why buying an established business may be one of your best options as you venture into the exciting world of entrepreneurship.

the friday fund

9 Advantages to Purchasing an Existing Business

If you're considering starting a new business, purchasing an existing one can be a smart move. Not only does it allow you to skip the often overwhelming process of creating a startup from scratch, but it also offers several advantages - let's dive in.

1. Lower Startup Costs

One of the biggest advantages of buying an existing business is the cost savings that come with it. Starting a new business from scratch can be a costly and time-consuming process. On the other hand, when you buy an existing business, you can avoid many of the start-up costs associated with launching a new business. Many of the initial costs have already been paid, such as equipment and inventory.

2. Established Reputation

One of the biggest risks in starting a new business is not knowing whether customers will respond positively to your offer or not. However, buying an already successful business is a way to eliminate that risk. By purchasing a business that has already proven successful, you'll be able to step into a situation where you already know how customers respond to the product or service you offer. This can save you time, money, and a lot of stress that would otherwise come with starting a new business from the ground up.

3. Access to Experienced Staff

If you purchase an existing business, chances are there will be at least some staff members who are already familiar with the business and how it operates. This can be extremely helpful, as they can provide training and support to help you get up to speed quickly. Additionally, they can help to smooth the transition for customers and minimize any disruptions during the ownership change.

4. Reduced Development Time

When you buy an existing business, you are essentially purchasing a turnkey operation with all the groundwork laid out for you. This means that the development time needed to build a business from the ground up is significantly reduced, allowing you to focus on growing and scaling the business rather than starting from scratch. Not only does this save time, but it can also be more cost-effective in the long run since you won't have to invest as much in initial infrastructure and resources.

5. Established Customer Base

One key advantage to buying an existing business is the presence of an established customer base. This customer base offers a steady stream of income, which can help offset the cost of purchasing the business. By contrast, starting a new business requires more effort to attract customers than would be necessary if an existing customer base were already in place. This is not to say that it will be effortless to maintain this customer base, but it is certainly an advantage to consider when evaluating the potential profitability of purchasing a business versus starting one from scratch. Additionally, having an existing customer base provides a foundation upon which to build and grow the business. 

Related Reading: 6 Ways to Attract New Customers

6. Access to Suppliers and Vendors

When it comes to purchasing an existing business, you have the advantage of inheriting the suppliers and vendors that have already been established and utilized by the previous owner. Maintaining these relationships is key to ensuring a smooth continuation of business operations. It's always helpful to do your due diligence and review the current contracts and agreements with these suppliers and vendors to ensure you understand the terms and any potential challenges that may arise. Communication with them is also important to build trust and a solid business relationship. With these key contacts in place, you should feel confident in your ability to keep the business running efficiently.

7. More Flexibility with Financing Options

One major advantage of purchasing an existing business is the increased flexibility in financing options. When starting a new business, many lenders require a minimum revenue requirement, which can be difficult to meet for a brand-new company. However, when you purchase an existing business, you already have an established revenue stream to work with, giving lenders more confidence in your ability to repay a loan.

By purchasing an existing business, you may have a wider range of financing options available, making it easier to secure the funding you need to grow or expand your business. This increased flexibility can be a game-changer for entrepreneurs looking to take their businesses to the next level.

New call-to-action

8. Evaluate Financial Data from Past Years

Reviewing this information allows you to gain insights into how the business has performed historically and helps you make more informed decisions about the future potential of the investment. Understanding the financial trends of the business can also provide a clear picture of its strengths and weaknesses, which will help you identify areas that require improvement. This is one advantage to buying an existing business that you won't have if you start a new business from the ground up.

9. Opportunity for Growth

Existing businesses often have more potential for growth. This is because they likely already have basic operations in place, allowing you to focus on expanding and improving upon what's already there. With a fresh set of eyes and ideas, you can bring new life to the business and take it to the next level. Whether it's implementing new marketing strategies, exploring new product or service offerings, or streamlining internal operations, the possibilities for growth are endless.

Where can you Find Businesses for Sale?

Small businesses for sale can be found through a variety of channels. One option is to search online marketplaces that specialize in connecting entrepreneurs with business owners who are looking to sell. First, try searching online marketplaces such as BizBuySell,, and LoopNet. These websites specialize in connecting buyers and sellers of small businesses.

Another approach is to work with a business broker who can help navigate the complexities of buying a small business and has access to a wide range of listings.

Don't forget to check with your local Chamber of Commerce or Small Business Administration for any resources they may have available. It may also be worth checking local classified ads or business publications in your area.

Word of mouth can also be a valuable tool – let friends, family, and colleagues know that you are in the market for a small business and see if they have any leads or recommendations. Another option is to attend local business networking events, where you can connect with business owners who may be looking to sell.

Whether you choose to work with a broker or use an online marketplace, doing your research and due diligence is key to finding the right small business to buy.

Financing Options to Purchase an Existing Business

Two popular options include business acquisition loans and SBA loans. Business acquisition loans are typically offered by traditional banks and allow buyers to borrow a large amount of money to purchase an existing business. On the other hand, SBA loans are backed by the Small Business Administration and offer favorable terms and lower down payment requirements.

Read more about using an SBA Loan to buy an existing business.

Read more about obtaining a business acquisition loan.

Both options have their pros and cons, so it's important to carefully consider your options and work with an experienced lender to determine the best financing solution for your particular situation. Remember, when it comes to financing a business acquisition, a knowledgeable and supportive lender can be a game-changer.

Find Your Next Lender Through the Fundid Capital Marketplace

Get connected to lenders through the Fundid Capital Marketplace to help secure the financing you need to purchase an existing business.

We've partnered with Lendio to bring your a simple way to access the funding you need for your business. Whether you are looking for an SBA loan or a business acquisition loan, you can compare your options by submitting one application.

Lendio's basic requirements for SBA loans:

  • 600+ credit score
  • At least $8,000+ in monthly revenue
  • 2+ years time in business

Lendio's basic requirements for business acquisition loans:

  • 600+ personal credit score 
  • $8,000+ in monthly revenue 
  • 6+ months time in business

See if you are eligible for free with no impact on your credit.

New call-to-action