In past articles, we have been revealing insider's strategies to building successful businesses from scratch. In the course of sharing my knowledge with respect to business building, i came to observe that a certain group of entrepreneurs are being sidelined. Now what are the interests of this group? You might ask.
This is a group with the mindset of; "why build a business from scratch when i can buy a small business and grow it?
Now why buy a business when you can build one? Below are 12 Formidable Reasons Why Entrepreneurs Buy Businesses Instead Of Building a Business from Scratch:
1. To Avoid the Risk Involved With Building a Business: Successful entrepreneurs who built great businesses from scratch definitely know the pain and sacrifice it took to achieve the feat. Most entrepreneurs shy away from the challenges of building a business from scratch and i bet you, it is not something you want to get involved with.
Entrepreneurs who don't want to go through the process of building a business from scratch usually opt to buy an already made business.
2. To Increase Profit: An entrepreneur may buy a business to increase the cash flowing into his existing business.
3. To Fulfill A Desire To Grow: When an entrepreneur feels there is a need to grow, buying a small business may be the next option.
4. For Diversification Purposes: Buying a small business is another sure way of taking advantage of an opportunity in an industry entirely different from the one you are currently operating in.
5. To Have a Value Driven Acquisition Strategy: Some companies adopt the acquisition strategy as their overall value driven plan. This is in a bid to increase the value of the company's value or worth.
6. To Buy up Competitors: Sometimes in business, threats are eliminated by strategic acquisition. A company that poses a potential threat can be bought to eliminate the threat.
7. To Utilize Excess Capital: When a company is flushed with excessive cash or capital, buying up a small business might be the next option instead of building a business from scratch.
8. To Gain New Distribution Channels: A business can be bought to increase and improve the buyer's distribution channels so that products can reach customers in less time.
9. To Gain New Management: An interesting way to bring a strong management team on board is by buying up the company where the mangers are employed.
10. To Increase Shareholders Confidence: Acquisitions increases shareholders confidence because it shows the internal strength of the entire business.
11. To Gain Access to New or Emerging Technologies: In the business world, it has been noted that 75% of upcoming technological innovations are brought in by small businesses. So acquiring such businesses puts you in control of their innovative technologies. For instance, Google Inc acquired YouTube and FeedBurner. Yahoo acquired Viacom and MyBlogLog.
12. To Strengthen the Company's Balance Sheet: Buying businesses strengthens a company's balance sheet. It shows the company has a strong growth plan and potential. Just imagine Oracle Corporation buying up 57 companies within a space of five years.
So these are the 12 formidable reasons entrepreneurs buy small businesses. Join me in the forthcoming article as i bring to you steps to buying a small business successfully.
