Buy Established, Scale Faster, Succeed Sooner
Biz Buy International connects motivated sellers and savvy buyers, giving business owners the exposure they need and entrepreneurs a head start.
Easier funding than starting fresh
Getting money to start a business is notoriously difficult. But securing financing to grow a company with a proven track record is a different story. Banks and investors are more likely to fund businesses that have been around for at least 3 years. And for good reason: according to the Bureau of Statistics, about 20% of new businesses fail within their first year. For many entrepreneurs, this means bootstrapping until they can prove their start-up is worth investing in. Buying an existing business allows you to skip the (often time-consuming and thankless) bootstrapping phase and go straight into growth mode.
Established customer base
If it’s been generating revenue for a while, it’s a safe bet that the business has an existing customer base and a proven product-market fit. Instead of starting from scratch, you can focus on expanding to other markets and deepening your connection to your customers.
Brand awareness
When you buy an existing business, part of what you’re paying for is built-in brand awareness, which saves you the time it takes to build a reputation.
Ready-to-go team
If your business comes with employees, you have a premade team ready and waiting and don’t need to worry as much about hiring employees. Not only can the existing team help you run your new business, but they’re also a valuable source of information about the business.
Understanding of strengths and weaknesses
The original owners will have discovered many of the businesses’ problems and friction points and can share those with you so you don’t make the same mistakes twice. Many entrepreneurs start businesses without fully understanding what they’re getting into. Buying an existing business can give you a clear picture of its strengths and weaknesses.
What Should You Look For When Buying A Business?
Consistent Financials
You don’t want to buy a dud. Ideally, any business you’re considering should be able to show consistent month-on-month revenue or at least the potential to reach a consistent level. The seller should have no problem sharing the business’s financials with you—in fact, this is a must-do before you even consider signing a contract.
Existing Reputation
It can be challenging to turn around a negative reputation, so your best option is to go for a brand with a good name. Browse online reviews on sites, scroll through the brand’s social channels, and listen to what people say about it online.
Current Operations
Take a look at the business’s operations. Changing things takes time and resources, so be wary if systems and processes look outdated. Smaller businesses will have less established operations, but they should still have processes for key parts of the workflow, like shipping and integrated tech stacks.
Consistent Traffic
Online businesses rely on website traffic to stay afloat. The more traffic a site has, the more potential customers it has and the more money it can make. When choosing a business to buy, look for steady growth and consistent traffic from multiple sources. Don’t rely on single-source traffic, since it can dry up when algorithms inevitably change.
Future Potential
A business might thrive today, but what about a few months or years? It’s essential to assess the future potential of the company. For example, consider whether its bestseller is a seasonal item, or its products represent a craze that will go out of fashion.
Future Customer Base
While a business’s current customer base might be healthy, evaluate if there’s room for expansion. Who is it targeting, and is that market nearly maxed out? Consider if there’s room to move into different markets and locations, too.
General Feedback
Knowing what customers think about a business can make or break your buying decision. Consider the kinds of positive feedback it gets and common complaints. What do existing customers like and dislike about it? Regarding dislikes, think about how you would turn it around.
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What Types Of Businesses Should You Buy?
Rate Opportunities Quickly
Use a set of criteria to measure the opportunity of each potential business without wasting too much time. For example, you might rate each of the following elements out of 10:
- Cash Flow
- Growth potential
- Reason for selling
- Time investment required
- Existing reputation and customer base
- Longevity
- What you can value add to the business to make it grow
Do Your Due Diligence
Ignore Aspirational Pitches
Verify The Business Model With Past Customers And Employees
Consult A Lawyer Or Attorney
Confirm Contracts And Deals With Existing Suppliers
Get in touch with Biz Buy International
Address
PO Box 6901
Cairns 4870