At one point or another in your professional career, you have probably dreamed of owning your own online business, but the daunting thought of starting a company may have made you postpone the idea.
It’s true: starting a business is a huge undertaking, intellectually, emotionally, and financially. Not to mention the risk—70 percent of startup companies will have failed after only five years. But there is a way you may be able to have the luxury of being your own boss and living your dream without having to start an online company from scratch; you can buy an online business. The advantages of purchasing an existing company are numerous. They include:
Elimination of the cards stacked against you. If you start your own business, you will have to take out a loan, shape your business concept, develop a strong customer base, and fight the bad luck that goes along with owning an early-stage company. If you buy an existing established company, on the other hand, it will already have stood the test of time. Successful businesses have proven track records that usually continue after they are sold. By purchasing an established company you are acquiring a business that has a successful sales model, marketing mediums in place, and search engine history that can not be bought. These things can take years to establish, and some start up businesses go under before they get a chance to see the fruits of their labor.
The opportunity to make the company yours . Many entrepreneurs dream of owning their own business because they envision shaping it to be exactly what they want. Although you may not have as much control over the skeleton of the company if you buy an existing one, you will still be able to apply your own ideas, expertise, and passion once you purchase it. Most successful businesses already have an infrastructure in place that works. In most cases it is much easier to make adjustments to an existing process, than to start one from scratch. Learning from the history of a business will allow you to customize it and make it your own.
Immediate cash flow. Because the company has already been making money for years, you can start earning cash immediately after you purchase an established business. Forget struggling to attract customers—you will already have a customer base you can use as a building block for future growth.
The chance to finance the cost. When you start a company from scratch, you need a sizable lump sum to get the business off the ground; when you buy an existing company, on the other hand, in many cases, you can finance the cost. By making payments instead of having to plunk down a large sum of cash, you will be able to maximize your buying potential.
This is not to discount the challenges associated with buying a business; there are many. To successfully manage the process, you should first do as much research as possible on how to go about buying a company. Next, you should realistically assess the cost of the type of business you are shopping for and what you can afford. You will then have to negotiate the price, arrange financing, and actually transfer ownership of the company. All these tasks can be made easier with the help of an intermediary, who will be able to guide you every step of the way.
In general, you will be much more likely to succeed if you purchase an existing company than if you try to build one from the ground up; many more purchased companies are profitable than start-up companies. And it makes total sense: An existing profitable business has already proven that it can work; it has already defied the odds. So as long as you continue to run the company wisely, you should be as successful as the previous owner.
When you start the actual process of shopping for an online company, you should strongly consider using a business broker. Buying a company is a complex activity that requires a third party to coordinate the activities of the buyer and seller; business brokers have the knowledge and expertise to assume that role. A business broker is not a sales person, but a business professional that facilitates the transaction to the benefit of his or her client. Many transactions fail when the buyer tries to exclude a business broker from the sale process.
Also keep in mind that buying an online business is very different from buying a brick and mortar business. The internet channel utilizes very different skill sets for customer lead generation, order fulfillment, and customer service. The business broker you choose must have a detailed understanding of these unique skill sets in order to effectively facilitate the transaction.