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 platforms to explore.

Below, we outline top sites, the advantages of purchasing a business or franchise, and how Trust Financing Solutions can help finance your investment.

Entrepreneurship Through Acquisition (ETA) has gained 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.

With the retirement of Baby Boomer business owners, a wave of established small and medium-sized enterprises (SMEs) is 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.

Financing from Trust Financing Solutions provides support for ETA. We recognize the potential for stable returns and a positive economic impact.

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

Top 4 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.

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.

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:

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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