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Why Is Established Vending Route Business For Sale Less Risky

businessman

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Why Is Established Vending Route Business For Sale Less Risky

businessman

The great digital disruption is the reigning phenomena in the market today.

With the prevalence of the internet, brick and mortar businesses are collapsing in favor of e-commerce.

Big corporations like Borders Group flourished in early days with $1.28 billion in net worth before declaring bankrupt in 2011 with a net loss of $680 million.

Amazon announced plans to close down all 87 pop-up stores over the next two years

amazon

Source: https://www.digitalcommerce360.com/2019/03/06/amazon-is-closing-87-us-pop-up-stores/

while apparel chain Gap intends to close 230 of its specialty stores with 40% of their income derived from online sales.

Source: https://www.bbc.com/news/business-47392738gap shirt

Blockbuster have ceased to exist while Netflix reigns in original content online streaming.

With the rise of e-commerce, comes a new wave of entrepreneurs and small businesses defying the norms of the market and making new impact.

Despite the change in business landscape today, it is still an uphill task to develop your own business.

The greatest challenge is to keep it going and profitable for the long run.

83.1% of the businesses are started from scratch. Only 50% businesses survive beyond the five-year mark. It is not easy to keep a business going. With each business comes various considerations from the relevant stakeholders, operational costs and capital, market strategy and unique selling point etc.

Hence, it may be easier to purchase an established vending route business than to start one from scratch. Here are five reasons why an established business is less risky.

Source: https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-buying-existing-business

1. You inherit the existing customer base.

inherit customers

As far as established business goes, you already have an existing customer base to rely on.

There is already a fixed buyer persona and you know what type of customers your products/services work well with. There is no need to reinvent the wheel of spending resources in discovering your type of client and devote many resources into developing the clientele base.

You would have already known what strategies are effective and what does not jell well with them. There is a ready customer pool that you can implement your new tactics and strategies immediately.

The lead time to seeing your results are generally much shorter and faster to reap the benefits.

2. You inherit the goodwill of the company.

good name of established store

Having to purchase a business with good reputation and branding image meant that you get to enjoy the fruits of the labor by the previous owner.

He/she may have ploughed through the hard ground to develop the relationships with crucial partners, collaborators and customers.

Getting someone to trust you is harder than maintaining a relationship.

Usually the company’s goodwill has helped existing and potential customers to trust the name.

Your efforts will be focused in maintain these relationships and improving on the company’s portfolio to build on further credibility.

Due to the momentum already built, you can expect things to take off at a faster pace.

3. You inherit the preexisting business processes and assets.

There are current processes already in place that continues to rake in revenue.

This may be good as it cuts your potential losses as you re-evaluate the business and the supporting strategies. There are business still coming in the midst of your planning and development.

The existing revenue can help to fund your next venture in a bid to bring the business to the next level.

You do not have to fix what’s not broken. If certain processes are good and bringing in more value, there is no need to revamp it.

In fact, you can focus on the weaknesses of the system than having to revamp the entire business process.

By doing so, it can minimize discomfort in change by changing only particular issues.

Having to minimize disruption is vital especially in the initial period of taking over the business. You also own the existing assets without having to set aside a lump sum to invest in new assets.

Thereby, cutting down your initial expenses and this sum can be re purposed towards other matters like training, research and development of the staff’s skill sets.

In the long run, these investments will reap longer lasting rewards – increasing the overall effectiveness and efficiency of the business.

4. You inherit the manpower/talent.

good employee's mindset

The staff can be your most valuable asset. With the right team, there can be synergy and innovation that elevates the business to the next level.

These staff are the one that works closest to the ground to give you the most accurate Intel on the business’ performance and condition.

They are the ones who may give you strategies and ideas that best suit the business; ideas that are innovative and doable. The talent are essentially your hands and legs to help carry out your vision and achieve the goals of your business.

They are the ones who maintain and develop relationship with your stakeholders.

In an established business, they have the practical experience, expertise and industry knowledge. Unlike a new start-up, you do not have to handhold them or train them from scratch.

There is very much less handholding and more constructive critique and feedback. By observation, a novice takes a year to learn, another to get good at what they do and only value adding to the company in the 3rd year.

With a new business, it can take longer periods to reap the benefits from your staff. This is assuming that they will stay in the company long enough.

Many may leave as they are still discovering their role and job fit.

5. You inherit the relevant licenses and permits.

permits

Save yourself the trouble of having to do a ton of paperwork and administration to apply for licenses and permits.

During the sale of the business, these licenses and permits are also transferred unto your name. The application process can take months with the relevant authorities.

Bypass the arduous process of stringent checks, researching on all the government regulations, tax compliance and obligations and get straight to the business.

In conclusion

less risky for businessman and investment if buying an established vending route business

The experience and benefits derived from existing businesses only helps to reduce the risk taken in a business.

A new business face much more uncertainty as it is not tried and proven.

Neither has its capabilities been proven competitive enough to secure a stable market share.

With proper processes and expertise in place, you can focus on new strategies to further the business than having to spend the bulk of your time experimenting.

We encourage you to take the leap into owning your own business.

However, do it with a calculated risk. In our perspective, an established business can provide faster and more attractive returns with less effort.

References:

https://www.reuters.com/article/us-borders/borders-files-for-bankruptcy-to-close-200-storesidUSTRE71F2P220110217

https://www.cnbc.com/2019/03/06/amazon-to-close-all-of-its-pop-up-stores-in-the-us.html

https://www.cnbc.com/2019/02/28/gap-to-shut-230-stores-over-2-years-posts-mixed-holiday-results.html

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