Potential advantages of buying a business

On Behalf of | Feb 13, 2023 | Business Law |

There are certainly advantages to starting a business from the ground up, one of which is that it often doesn’t take that much capital. People will start a business on the side and then attempt to grow it into a full-time occupation.

However, if you buy an existing business, there are certainly advantages to doing it that way, as well. Let’s look at some of the potential ones that you may want to consider.

The business already has cash flow

For one thing, if the business has been even mildly successful, it is already earning money. You can use this cash flow to pay employees, implement changes and secure financing. That can be harder for a start-up, because you can’t even prove to a lender that you’re able to make money yet.

You buy a business that comes with assets

Another advantage is that an existing business probably already has the assets it needs to function. You may want to buy upgrades and make changes, but you’re not starting from scratch. A lot of times, the former employees will even be retained so that you don’t have to build a workforce.

You get name recognition

Finally, name recognition is huge for any company, and it can take years to create. It just takes a long time for even a local business to establish itself in the public consciousness. A start-up faces a huge hurdle, but an existing business that already has brand recognition and customers will give you something of an edge.

No matter which way you decide to go with your company, be sure you know all the legal steps you need to take.

Beverly Hills Bar Association | Lead. Advocate. Serve.
Super Lawyers
The State Bar Of California | July 29 1927
LACBA | Los Angeles County Bar Association
ABA Defending Liberty Pursuing Justice