Registering a new company and buying an existing one both have their pros and cons. In today’s article, we focus on the latter.
Here are the advantages of looking for a business for sale rather than going for fresh registration.
Fewer Risks than Incorporation
While buying a company, you will not have to contemplate if the idea is a good one. Meaning that you will already have all the financial records in hands, so you can weigh in for yourself to check if the company is making a good sum, and the money you are going to put on it is going to be worth it.
Easier to Raise Money
Pitching to investors for an existing company rather than a new one is going to be easier for the same reason we talked in the previous point. Investors will get to know the present financial situation of the business, so they will become more assured while putting their money.
This may not be a problem for many, but there are some jurisdictions in the world where the registration of business may take months, or even more than a year. In such cases, you will save a lot of money and time because even if you need to do the paperwork for acquisition, it will be littler and the process will finish faster than registration.
Existing Staff and Knowledge Transfer
You will not need to hire as people are already working in the company. This also translates to you will make money from day one.
Also, knowledge is very important while running a business. Thus, you can ask the previous owner for important insights and things they have learnt on the way. You can add the data you got from them with your own expertise and understanding to scale the company.
Tip: Always go through a list of business advisors before buying a business. They can help you with various things, such as appraisal, market statistics, company potential, paperwork, competitors, etc.