When you think of the word “trend,” your mind likely turns to fashion, beauty, interior design and other creative fields where people tend to draws inspiration from similar sources, leading to the popularity of certain looks or styles. But trends aren’t just relegated to the world of consumer products; as economic conditions change, trends also emerge in the world of business, particularly in the area of entrepreneurship, where patterns emerge regarding who is starting businesses, what kinds of businesses they’re starting and how they’re getting them off the ground.
Those who keep up with the latest in entrepreneurship have noticed a new trend emerging over the last few years–the desire to buy an existing business rather than start one from scratch.
Who Is Buying Businesses?
While people from all age groups and walks of life can decide to become entrepreneurs, there are some key groups that are beginning to explore their options for buying existing businesses. The first group is Baby Boomers who are getting near retirement age. Many of these people are not ready to simply stop working or cannot afford to completely retire, yet they no longer want to continue with the daily grind of their current jobs. Similarly, 30-somethings are also beginning to take interest in purchasing businesses in order to become their own bosses and put the skills that they’ve developed working for others to use for themselves.
Who Is Selling Businesses?
Just as there are patterns emerging in regards to who is buying businesses, there are definite trends developing about who is looking to sell their businesses. Often, sellers are people who want to retire but either do not have children to pass their businesses along to or do not have a succession plan for passing the business on to an employee. Younger people who managed to build successful businesses but found that they do not enjoy the management portion of being an entrepreneur or have the financial knowledge needed for success are also looking to exit their business. In both cases, sellers are often willingly to continue to work with the buyers after the sale to ensure a smooth transition.
Why Are Entrepreneurs Now Buying?
While it’s doubtless that buying businesses has become a new trend in the world of entrepreneurship, what may not be clear is exactly why this is occurring. In the past, many people who wanted to go into business for themselves gravitated to start-ups, but those days are passing because of the benefits that buying a business provides, which include:
– Less Risk. Purchasing an established business is typically less risky than starting one from scratch. For those who are nearing retirement age or who currently have good paying jobs, this is very appealing.
– Increased Supply. With so many Baby Boomers reaching retirement age, there are more small businesses available for sale, providing more opportunity.
– Easier Funding. Typically, it is easier to obtain funding for purchasing an established business than it is to get money to start one from scratch. With banks still keeping to tighter lending guidelines, many people are finding themselves unable to acquire funds for start-ups, but they may be able to obtain traditional loans for existing companies.
If you’ve been dreaming of becoming an entrepreneur and starting your own business, buying an existing business could be the opportunity that you’ve been waiting for to realize your dream. Online businesses make particularly good investments, as they usually require less tangible property and make the sales process more straightforward. To learn more about what online businesses are currently for sale, call us today and speak with an online business broker.