RoadBlock Busters

An Alternative: Buying an Existing Business

Starting a Step Ahead

If you're not up to the task of tackling roadblocks head-on, consider going around them by buying an existing business instead of starting a new one. Of course, you probably won't find the exact business you would have started, but you'll be able to make changes to the company you buy once you've taken it over. And buying a business instead of starting one means you'll have an operation that's already staffed; an existing customer base and, therefore, cash flow; a proven track record; a relationship with insurance companies and other benefit providers; and established deals with suppliers.

Businesses go up for sale for a variety of reasons. Sometimes they're not doing well and the owner wants out. But in many cases, the companies are profitable and up for sale because the owner wants to retire or has passed away, or the entrepreneur simply wants to start something new.

A key drawback to buying an existing business is that it typically takes more cash than starting from scratch. Also, when you buy a company's assets, you may get stuck with at least some of its liabilities. But you'll have the opportunity to study the operation, negotiate the terms of the deal and avoid a wide range of start-up challenges on your path to business ownership.

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This article was originally published in the May 2000 print edition of Entrepreneur with the headline: RoadBlock Busters.

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