Buying a Business During a Pandemic
Nearly every industry has experienced significant changes and shifts during the COVID-19 pandemic. With the current economic decline that has followed, it may seem like right now is a risky time to begin your entrepreneurial journey. However, buying an existing business rather than starting your own from scratch can help mitigate some of those risks.
The benefits of buying a business
While it may seem like a big upfront investment, there are a lot of good reasons to purchase an existing business. Here are some key benefits of taking this route:
You’ll save time and money developing a new concept.
When you buy an existing business, the concept — including branding, such as a logo — has already been created. You won’t have to come up with your own product or service offerings and brand concept (or pay someone to come up with it for you).
There’s often clear evidence of success.
According to data from the U.S. Bureau of Labor Statistics, about 45% of new businesses fail within their first five years, and just 25% will make it past 15 years. If you seek out a business that has been operational and profitable for longer than five years under the current owner’s leadership, you can feel confident that you’re buying into a successful model.
You’ll cut down on the usual startup ‘ramp-up’ period.
Every new business requires time and money to get off the ground. If you choose to buy an existing business, your investment should be more or less turnkey. Because you have an existing staff and client base, you’ll save money on recruitment and new customer acquisition.
The previous owner can guide you in the transition.
If the business’s previous owner is retiring or moving on to a new venture, they might be able to stay on in the beginning to guide you in the transition after the sale is finalized. You may even be able to shadow the existing owner before you take over and learn the ins and outs from the person who launched the business. Depending on your relationship with the seller, you may want to try to keep in touch so they can answer any questions you may have as they arise.