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LOS ANGELES/WESTWOOD, CA
10940 Wilshire Boulevard
Suite 1600
Westwood, CA 90024
Phone: (310) 208-7766 x 101
Fax: (866) 686-7851
Email This Office
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VR Business Sales|Mergers and Acquisitions
LOS ANGELES/WESTWOOD, CA
How to Buy a Business
Buying an existing business or established franchise will dramatically reduce the risk when compared with start ups since statistics estimate that 60% of start-up businesses fail within the first three years. Additionally it takes two years on average for a start-up to become profitable. Even comparing start-ups with such other options as home-based businesses or MLMs, in most cases, your chances of success are still clearly best when you buy an existing business. Outlined below are the ten primary advantages of business acquisition vs start-up:
1) Much lower risk of failure,
2) Business generates cash flow from day one (preferably positive cash),
3) Proven business concept and processes,
4) Proven products, services, marketing and sales strategies,
5) Established customer base providing referrals and references,
6) Established suppliers,
7) Trained employees in place,
8) Immediate credibility and perception of success,
9) Seller likely to lend support and may assist with financing,
10) Easier to secure affordable financing to complete the acquisition.
If the business has a positive cash flow, proven track record and perceived stability, it makes it easier to secure affordable acquisition financing. When starting a business, every aspect of the business is unknown. You don't know who your customers will be; you don't know how many employees you will need; you don't even know if the business will succeed! With so many unknown variables, lenders have no choice but to reject the financing request, labeling it as “too risky”. It is estimated that less than 10% of all startup businesses are able to successfully secure the financing required at the outset. This is due to the high level of risk start-ups pose to lenders because every aspect of the business is unproven. Yet many people dream of the freedom and control over their own destiny that comes with owning and successfully managing their own business. Our experienced VR Business Brokers are in touch with the market place and will be an integral part of your search for the right business opportunity for you.
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