Business AcquisitionMost of the times, it is beneficial to buy business than setting up the new due to inherent advantages in buying. It is not necessary that business buying will always results in substantial cost saving but may bring lot of intangible benefits that gives value creation to the buyer.
- Advantages of buying Existing business
- Process of Business Buying
- Key considerations for Due Diligence
- Case study for a buying Existing business
- How UnicOpp supports in business buy
Advantages of buying Existing BusinessTime saving by by passing multiple Steps: Setting up a facility, certification, product development, supplier building, hiring people, training them, developing market could be avoided, if an existing business is bought. The buyer can bypass all these processes and save time & sunk costs.
Obtain Customers Base: Minimum revenue is confirmed as the business comes with existing customer-base. The buyer can leverage this customer base to cross-sell other Products and Services which will drive future growth. It also reduces necessity to spend too much on marketing.
Get Intangible Assets: A Buyer can get intangible assets like brands, patents, and accreditations which were built over years. The Buyer can directly focus on growth from this base and create value.
Acquire Industry/Local knowledge from Seller: A Buyer from other Industry/Location can understand Industry structure, Local Competitors, Strategies, Customer behaviour etc. from the Seller. This would be far less risky than exploring a new Industry/Location through a Start-up.
Lower Risk: An existing business is a proven model with defined risk and reward. The uncertainties are also limited for existing businesses. Hence risk is comparatively less in existing business than the new.
Acquire with lesser price: A Buyer with Industry knowledge and ability to turn-around a business can get critical assets below market value.
Financing is easy: As established businesses already have cash flows and assets, the buyer can obtain business finance easily compared to start-ups.