Starting a business can be an enticing dream. It’s also notoriously difficult to come up with an original idea, find the right team and fund its growth.
If you want to work for yourself, there may be an easier way — buying an existing business. Think of it like renovating a house instead of building one from the ground up, says Mark Zweig, entrepreneur-in-residence at the University of Arkansas Walton College of Business.Here are four reasons to consider this path to entrepreneurship.
“There’s a lot of intellectual capital when you buy a business,” says Randy Katz, founder of Synesis Advisors and past president of the California Association of Business Brokers. “The employees have seen pretty much any kind of problem that you might run into, which means that they probably are better at foreseeing problems and better [at] planning for problems.
Business sellers may also be willing to finance the business purchase, Zweig says, especially if they’re eager to retire and don’t have a successor.You can do due diligence You can look through an existing business’s books to make sure everything is above board, from classifying workers correctly to complying with sales tax laws.
Working with an attorney and CPA with experience in business acquisitions can help you stay on top of the complicated legal and tax considerations involved in a business purchase.