Starting a Business vs Buying an Existing Business

Options for Starting or Buying a Business

Starting or buying a business is a significant decision for entrepreneurs. For those looking to buy an existing business or franchise, there are numerous opportunities and sites listing the businesses for sale, as shown below.

This article describes the many advantages of purchasing a business or franchise, and how Trust Financing Solutions can help finance your investment.

Buying a Business is also referred to as Entrepreneurship Through Acquisition (ETA) .  This has grown steadily in popularity as a viable alternative to traditional start-ups because it allows individuals to take ownership of an existing, cash-flow positive business rather than building one from the ground up.  The success rates are often much higher when taking ownership of an established, profitable business rather than trying to create a business from scratch.

The Problem  – The Solution

Entrepreneurs have a problem: start-ups.  Almost all start-ups either fail or never truly reach a sustainable size.

Many people who want to own their company – rather than work for someone else as an employee – think the only option is to do a start-up from the ground up. That is very hard to do and risky.  There is a better way…

What if you could skip the start-up phase and generate profitable revenue from day one?  You can.  Learn a great “hack” to success in Buy, Then Build.  You can begin with a sustainable, profitable company and grow from there.

With the retirement of Baby Boomer business owners, a wave of established small and medium-sized enterprises (SMEs) are available now, creating a prime opportunity for entrepreneurs to step-in.  ETA reduces the risks associated with start-ups by providing an existing customer base, operational structure, and revenue stream, making it an attractive path for those looking to accelerate their entrepreneurial journey.

Trust Financing Solutions provides the financing to you so you can buy the business.

Contact us and let’s get started on your deal.

Top Sites for Buying a Business or Franchise

  1. BizBuySell
    The largest online marketplace for buying and selling businesses, with thousands of listings. They have great resources too: Resources
  2. Franchise Direct
    Offers a wide range of franchise opportunities, complete with resources to explore various industries.
  3. BizQuest
    Features business-for-sale listings, including franchises and established businesses.
  4. BusinessesForSale.com
    A global platform providing opportunities for buying businesses and franchises in different sectors worldwide.
  5. Business Brokers – there are hundreds of business brokers who have listings that are private. You can find those Brokers here and talk with them about your interests and what they have. You can learn from them too. Remember, they represent the Sellers interest, not you – the Buyer. Talk with them but don’t agree to work with one Broker exclusively for your search. They represent the Seller.
  6. LoopNet – List of businesses for sale. There is an easy to use search function on this site.
  7. List of Brokers  – This list provides links to many broker companies that have businesses for sale.
  8. More Franchise Business Sites

Advantages of Buying a Franchise or Existing Business

  1. Buying a Franchise
    • Advantages:
      • Proven business model and brand recognition.
      • Support and training from the franchisor.
      • Established marketing strategies.
    • Disadvantages:
      • Higher upfront costs for franchise fees.
      • Limited operational flexibility due to franchisor rules.
  2. Buying an Existing Business
    • Advantages:
      • Established customer base and revenue stream.
      • Operational infrastructure already in place.
      • Immediate cash-flow opportunities.
    • Disadvantages:
      • Potential hidden issues with the business.
      • Risk of customer loss during the transition.

How to Identify the Right Business or Franchise

  1. Define Your Goals: Identify your interests, skills, and financial objectives to find a suitable business.
  2. Research Thoroughly: Use platforms like BizBuySell to explore listings that match your criteria.
  3. Evaluate Financials: Analyze profitability, revenue streams, and operating costs to ensure the business meets your expectations.
  4. Conduct Due Diligence: Assess the business’s legal, financial, and operational records to avoid surprises post-purchase.

Debt Financing Options from Trust Financing Solutions

Buying a business often requires significant capital. Trust Financing Solutions offers tailored debt financing options, including:

  • Term Loans: Fixed-rate loans for business purchases.
  • Working Capital: A critical element for taking ownership and transitioning operations.
  • SBA Loans: Ideal for small businesses, offering favorable terms and a low down payment (equity infusion) of 10%.
  • Lines of Credit: Flexible funding to manage cash-flow or cover unexpected costs.
  • Commercial Real Estate Loans: Perfect for acquiring business properties as part of your purchase.

Documents Needed for Debt Financing

To secure financing, prepare the following:

  1. Business Plan: Clearly outline your vision and financial projections.
  2. Tax Returns: Provide personal and business tax filings from the past 2–3 years.
  3. Financial Statements: Include current profit and loss reports, balance sheets, and cash flow statements.
  4. Purchase Agreement: Details about the business or franchise you’re buying.

Work with a trusted advisor to ensure all documents are accurate and comprehensive. We can introduce you to the team.

NOTES from the Guide to Buying a Small Business:

“Start-ups may seem the least expensive initially, but US Department of Commerce statistics show that 65–90 percent of start-up businesses are no longer in business after five years.

Now, consider buying an existing business. The same statistics that apply to the failure rate of small businesses show that if you buy an existing successful business there is a 90–95 percent chance that the business will still be in business after five years (provided, of course, that you buy it right).”

Here is a very helpful book for everyone thinking about buying or selling a business:

More information to know:

Business Acquisition Financing

Entrepreneurship Through Acquisition (ETA)

Why Trust Financing Solutions?

As a trusted provider of funding for business operations, growth, and real estate investments, Trust Financing Solutions offers customized financing solutions to support your entrepreneurial journey.

With expert guidance and competitive rates, we help you achieve your business ownership goals.

Let’s Get Started!

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