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Will Profit or Loss if you Buy a Business that is Already Running ?

For those who are entrepreneurial, setting up their own business is a dream come true. Building a business from scratch, channeling creative ideas to develop it, to see business become successful is an ideal way for entrepreneurs.

    But unfortunately, not all businesses can have a way like the one written above. Many are successful, but not a few who fail in the middle of the road. This possibility often haunts prospective business people until they prefer to buy an existing business, then just move on.

    The question is, is buying a business that is already running the right decision? Of course every decision in the business world carries risks, no exception when you decide to buy an existing business.

    This article will discuss what are the advantages and disadvantages of buying a business that is already running. This can also be a consideration for those of you who are thinking, whether opening your own business and building from scratch or buying someone else's business and developing it to be more successful. After reading this you can also read the Secrets of Small Business Tips to Success so that you understand about how to start doing business right.


    Benefits of Buying a Business That is Already Running

    There is already a business model left to run

    Business model canvas (BMC) or business model framework is something that must be owned by every business. If you buy a business that already exists, you do not need to be confused thinking about this. Especially if the business has been running for at least 5 years.

    Not only that, the business usually also has a ripe business plan. All of these advantages will make it easier for you to immediately run to grow your business.

    Has a strong customer base

    Customers are one important factor determining the success of a business. This is what often causes startup businesses to fail, when they are unable to ingratiate customers to continue using their services or products.

    But this does not happen to businesses that are already running. With a customer base you have, you can do sales in a short time and create new product innovations that will be introduced to them. In this way, you will achieve success faster than building a business from scratch.

    No need to build a reputation

    It is common knowledge that reputation is everything for business people. For their brand to be trusted by the public, they must have a good reputation. A reputation cannot be built overnight.

    When you buy a business with a good reputation, this is a big advantage. A positive reputation means that you are trusted by the community, have a loyal customer base, and guarantee success.

    Saving time

    In contrast to startups who have to really build their business from scratch (in some cases, certain businesses can be established without any capital at all), you are at the starting line far ahead of them.

    When startupers spend their time building reputation, trust, and finding customers, you are already at the stage of developing a business. All the difficult parts are over and you have different challenges with them. Ideally, you can achieve success faster than startups.

    The infrastructure that is already available

    For a newly established business, the distribution of funds is very vital. It is not uncommon for them to set aside infrastructure due to cost constraints. Unlike the case with a business that is already running. All infrastructure problems have been resolved.

    You will have your own office, complete inventory, credible employees, and a variety of assets to support the company's operations.

    Experts and experience in the company

    In addition to costs for the main activities of production and distribution, another sector that is no less financially draining is the cost of employee training. Without a qualified executor, it is impossible for a business to develop.

    If you buy a business that is already running, the problem will be solved by itself. Without the need to provide training to them, experienced experts are ready to work for you.

    Permanent policies and procedures

    A business that has been running for a long time certainly has its own standard in solving problems. During their existence, many problems have been found and the right solution to solve them has been there.

    This clearly reduces risk and saves more time for decision making. In addition, the business also has its own policies and procedures in its daily operations. When you build a business from scratch, this process can take years.

    Unlimited access to all company assets

    A common concern for startup founders is work space, adequate facilities and infrastructure, as well as warehouses for storing products. These three things are available in the business that you buy.

    Because these concerns have been overcome, you can devote all your mind and energy to the marketing and customer service sectors. You can also focus on improving the quality of existing products or making innovations by launching new products.

    Existing company assets make the company's financial condition safer because it is also easier to gain trust from financial institutions. Thus, you will not have difficulties when needing loan funds. As collateral, you can use the assets you have.

    The biggest challenge is the company's growth

    Buying a business that is already running means that you just have to fix the deficiencies they have. The company must continue to improve itself so that it can grow rapidly among its competitors.

    Identify which sectors are felt to be lacking, take immediate steps to improve, discuss with staff what steps should be taken.

    Transfer of knowledge from the previous owner

    Trial and error in the business world is a natural thing. But true business people know that as much as possible they must minimize the risks that may be faced. This is the advantage that can be obtained by those who buy old businesses.

    There will be a transfer of knowledge from previous owners based on their experience in managing the business. You are provided with manuals and manuals about the obstacles that may arise and how to deal with them.

    Many loan funds available

    Long-running businesses usually have good relations with banks and other financial institutions. Having a good credit history, better. You as a new owner will have no trouble getting a loan from them.

    A positive business track record increases your value in the eyes of lenders, so that anytime you need an injection of funds, you can get it quite easily.


    Disadvantages of Buying a Business That is Already Running

    Starting a business without experience

    Your business may already have a lot of experience, but not with you. Both of these have very big differences. For example, you buy a supermarket that has been operating for 6 years, but you have never been in the world at all.

    If so, your business has a greater risk of failure. Before buying a business, it helps you draw a little experience in advance.

    The possibility of greater costs

    This depends on the type and structure of the business being run. Don't always think that buying a business that is already running is always a good decision. It could be that you have to pay a greater cost.

    For example, such as building or building costs and legal aid costs. Although rare, it does not mean you will not experience it. If so, then you have to prepare a lot of money to organize your business.

    It takes time to build trust

    Having skilled and experienced workers may greatly benefit your business. If they disagree with your decision and policy, this is where new problems will re-emerge. You have to gain trust and convince them.

    This process of building trust can take a very long time. If you do not get the trust of the workers, your business is difficult to run smoothly.

    Customer base that is not always reliable

    News of the transfer of business ownership from the old owner to the new owner will spread rapidly among customers. They might still be loyal to use your product in the beginning. But you should not feel calm about this.

    All you have to do is build strong relationships with customers and regain their trust. If not, then they can move to another company at any time. This is why having a large customer base is not always a good thing.

    Big tax consequences

    Don't be happy to know that the business you are buying has a lot of assets and inventory. Check which ones are the biggest tax costs. Usually this aspect does not count when someone buys a new business.

    After officially changing hands, they are aware of the magnitude of the tax value of certain assets that must be paid.

    Difficult to innovate

    As someone who has just been involved in a new business, you have a keen eye for researching the problems that are there. Your head is filled with a myriad of new ideas that you can't wait to realize.

    At this point you will realize that in a system that is already structured and neatly organized, the new ideas that you offer are not accepted. Even your own workers might reject the presence of this brilliant idea. Inevitably you have to follow all the existing arrangements.

    There is no originality

    Some entrepreneurs like to create something creative and original. They are proud because they have succeeded in creating a new breakthrough that has never been made before. However, this does not happen if you buy a business that is already running. Buying a business that someone else has owned is not original.

    Policies that are not according to thought

    This is the biggest challenge for those who buy other people's businesses. Existing policies that have been running for a long time are not what you think. On the other hand, you can't change it overnight. This will trap you in a long inner struggle because you feel like you have to do something you don't like.

    The business is not yours

    You may be the rightful owner. By law, you are the owner. But it's hard to tell yourself that the business is yours. Like a child, you don't give birth and raise him, but anodize him when he grows up.

    There is a very big difference, causing no sense of belonging to the business you run. Especially if you find that there are many different values ??between you and the business that you are running now.


    Buying a business that is already running is the choice of some people. Before making a decision, first consider the advantages and disadvantages. Will buying the business make a profit or will it bring you closer to failure? Before you start this business, it's a good idea to read 7 Mistakes When You Start A Business, so you avoid loss in starting a business.