Sometimes it isn’t ideal or possible to start your own business from scratch and guide it toward ultimate success. Indeed, the best option for many aspiring business success stories is to seek out an already successful business and simply purchase it and take it over during a period of sustained success. This spares them the high cost, both financially and psychologically, of starting a new business. But is it worthwhile to take a shortcut to success?

While there are several good things about buying a business, taking this shortcut to business ownership comes with its own unique set of drawbacks as well.

The Pros of Buying a Business

Let’s face it: there’s a high risk of failure when starting a brand new business. The financial investment is often high, exposing a business founder to immense financial risk and vulnerability. At the same time, business is an extremely competitive environment and it is simply impossible for every new business to turn into a profitable success story. By purchasing a successful and existing business, financial risks are lessened and there is a greater chance of success. There are less vulnerabilities right off the start.

Furthermore, an established business brings with it an established and respected line of products, as well as a loyal base of clients who swear by that business’ unique approach and product line. Complimenting a trusted line of products is a group of employees who are already familiar with them and have experience make sales, building relationships, and working to further the aims of the company which they have been with since day one. Their combination of knowledge, loyalty, and success, is something that most business owners would pay for all by itself.

But it isn’t all advantages. Business purchases can also result in some unique drawbacks and negative aspects that might make the faint of heart think twice.

The Cons of Buying a Business

If you’ve ever sold anything — ever, in your entire life — you’re familiar with what it takes to make a sale: you simply talk about all of the advantages and forget to mention any of the disadvantages or drawbacks of the product you’re pushing. The same thing applies to business purchases. Business owners who are looking to sell their business are innately familiar with a good sales pitch and they’ll tell you most anything you want to hear in order to have you take their business off their hands. This means that there is a relatively significant risk of misrepresentation. Such behaviour can lead to some unpleasant surprises down the road — things such as cooked books, product defects, or problem employees that don’t help to further the brand.

And, speaking of employees, it’s worth noting that their loyalties likely lie with the original founder of the company. Small businesses are often intensely personal affairs and it’s likely that the business’ founder is friends with the people they’ve hired and trusted to build a successful brand. Their loyalties might not easily shift to new ownership or management, and this may cause some problems that affect how the business operates and whether or not it scan continue on an upward track.

Also, there’s the spectre of making changes to the way things operate. Again, employees are likely very loyal to the founder of a business. While this obviously means they enjoy the personal and friendly side of that individual, it likely also means that they’re loyal to the old way of doing things. If you try to make changes to the way the business operates, or change things such as its logo, branding marks, or product line, there’s a good chance that you’ll experience a significant amount of resistance and pushback. Remember that, for everyone who has been with the business since day one, it’s not simply business as usual — it’s personal.

Conclusions

Buying a business, despite the potential drawbacks, is still the best way to jump directly into the business world with a success story in your portfolio. It’s an investment that poses fewer financial risks and exposes owners to fewer vulnerabilities.

But careful attention must be paid to detail — especially the company’s product line, employees, and balance sheet. Proceed with caution and commit to communication, and your business purchase can be turned into your very own success story in due time.