Starting a business from scratch can be exciting, but it may not be right for you. For many aspiring entrepreneurs in Vancouver, buying a business, or entrepreneurship through acquisition, offers a better path to entrepreneurship. Instead of starting from zero, you step into an established operation with existing clients, systems, and revenue.
What Should You Consider?
Financing
From my experience working with past clients, it’s easier to secure financing from banks when buying an existing business than it is to get a loan for starting a new one. Depending on the type of business you are interested in and the amount of capital you have, buying a business might be a better decision.
Licenses and Permits
In Greater Vancouver, some businesses require additional licenses or permits in addition to a business license. Bars (liquor license) and daycares (childcare license) are good examples. These permits or licenses can take time and money to receive. If this applies to the type of business you are interested in, then you need to consider the the cost of applying for one compared to taking over a business with the appropriate licenses in place.
Risk
Running a business always comes with inherent risks, but if a company has demonstrated consistent profitability over 10 years, those risks are significantly reduced. When you’re buying a business, you’re not starting from scratch — you’re taking over its existing successes and building on a proven foundation. To some degree, the business model, market, and demand have already been validated, giving you a clearer path toward stability and future growth.
Barrier to Entry
If the industry you’re interested in has a high barrier to entry — whether due to government regulations, location restrictions, or heavy brand loyalty — then acquiring an existing business can be a smart and strategic way to enter the market.
Goodwill and Branding
Reputation and brand recognition take years to build. As an aspiring entrepreneur, you’ll need to decide whether you’re better off creating a new brand from scratch or taking over an established business with proven goodwill and a solid reputation. Buying an existing business often gives you a head start, allowing you to focus on growth and improvement rather than starting from zero.
Thinking about buying a business but not sure what to expect? Here’s a step-by-step guide for you to get started!