Skip the Start-Up and Buy

Why Buying a Proven, Established Business Outperforms Starting One

When you're looking to enter entrepreneurship, the allure of starting fresh with a new idea is tempting.

But let's dive into why purchasing an established, proven-profitable small business often offers a more secure, advantageous route.

Here are the top five reasons why buying beats building from the ground up.

1. Immediate Cash Flow

The immediate cash flow is one of the most compelling reasons to buy an existing business.

Unlike a startup, which may take years to turn a profit, an established business already has a proven track record.

This means the business generates enough revenue to sustain itself and cover your salary as the new owner.

That's money in your pocket from day one, a crucial aspect, especially when you rely on this income to support your personal and business loan obligations.

2. Proven Business Model

An existing business has a tried-and-tested model, which means the products or services offered have already been accepted in the market.

There's no need to spend time and resources on the trial and error that comes with a startup. This reduces the risk significantly and provides a more straightforward path to success.

3. Established Customer Base

Starting new means attracting and building a customer base from scratch—a daunting and uncertain task.

An established business brings along its loyal customers.

This not only ensures continued sales but also provides valuable insights into customer preferences and behaviors, which can drive further growth under your stewardship.

4. Easier Financing with SBA Backing

Acquiring an existing business often involves less financial strain, thanks to the possibility of securing a bank loan backed by the SBA.

Lenders are more willing to finance purchases of businesses with a solid financial history, including sufficient net cash flow to cover debt service coverage ratios (DSCR).

This not only eases the financial burden but also accelerates the buying process.

5. Reduced Start-Up Hassles and Risks

Lastly, skipping the startup phase means you avoid many initial hurdles, such as setting up operations, compliance issues, and workforce recruitment.

An established business has all these elements, letting you focus on growth rather than the basics.

The Importance of Having a Business Buyer Ally

While the advantages are clear, buying a business has risks.

Just because a small business listing is marketed as SBA-qualified doesn't mean it's true.

It's like fishing with bait; sometimes, what's advertised to hook you is more about reeling in your commitment than catching a proven-profitable business that truly qualifies for bank financing backed by the SBA.

This is why having a dedicated business buyer ally is essential.

A seasoned business buyer ally will guide you through these intricacies, spotlight potential red flags, and help ensure a smooth and successful ownership transition.

Remember that a successful transition is critical—it preserves the vital customer base and cash flow that motivated your purchase decision over starting from scratch.

Deb Curtis is a steadfast business buyer ally for business buyers, prequalifying and sourcing the best bank loan structure backed by the SBA.

After an extensive career in various-sized banks, Deb departed from corporate America as an SBA lender focused on business acquisition deals. She was driven by her belief that the narrative norm in micro M&A SBA lending needed a significant shift to protect small business buyers.

She experienced firsthand the inconsistencies in banks' credit policies, the frequent turnovers within SBA loan teams, and a prevalent inclination to decline buyer applications based on each bank loan shop policies and politics—challenges she found increasingly intolerable.

Stepping away from corporate confines, Deb founded her business acquisition loan consulting firm in 2018. This move allowed her to wield more significant influence, ensuring she could say "yes" more often to her business buyers while avoiding the tumult of direct loan shop credit policies and politics.

Today, Deb is renowned in the SBA micro M&A lending industry as a business buyer's ally who prioritizes 'quality over quantity' in business acquisition loan packages.

Her core values are integrity, loyalty, and transparency.

She builds client small business portfolios with first-time small business acquirers who return to purchase finance from other small companies over the years to come.

Her firm is dedicated to sourcing the finest SBA-backed bank loan projects and ensuring a seamless ownership transition post-closing for her business-buying clients.

Follow: Curtis Small Business Finance Solutions, LLC dba Deb Curtis and Business Buying Banter - No BS

Subscribe: Business Buying Banter - No BS