Buying a discount business can be a great investment for a business buyer, especially when it comes to affordability! For the right entrepreneur, there are numerous good reasons to buy a discount business, which include some of the very same reasons buying an established business is a great venture. The background benefits of buying a cheap business are that they already have a location, facilities & equipment, licensing, employees, and a customer base.
There are some key differences, however, in buying a discount business, because, of course, it is distressed in some way or another. The circumstances of a discount business can be highly varied. For some of these businesses the owner is simply ready to retire and has taken a step back from the business. In this case, a new owner would be able to step back in and revitalize the business fairly quickly. In some cases, the business owner may not have had the necessary management skills required to run their business, but a buyer with great management skill set could make a significant difference.
Then there are discount businesses that haven’t been able to adjust to their evolving market. So a buyer with more current industry experience could buy a discount business and easily develop a return on their investment by modernizing the business and implementing the appurtenant changes. As you can see, there are a number of reasons a business can become discount. Before you decide on buying a discount business, we suggest you weigh the pros and cons, which we’ve outlined below, and see how they fit into your potential business plan. This will help you to determine if a discount business is a good investment for you!
The Pros
-Discount businesses have a low purchase value.
-There is a low level of risk involved in purchasing a business at a low price.
-There is a higher potential for reward and return on investment.
-Theses businesses have highly motivated sellers, which generally make for faster transactions.
The Cons
-A discount business is going to take lots of work to turn it around.
-Discount businesses often have limited immediate cash flow.
-These businesses tend to do better with buyers who have industry expertise.
Ultimately, choosing to buy a discount business offers a unique opportunity to break into business ownership at a low cost and with limited risk. If you are interested in the prospect of purchasing a discount business, we invite you to sign up to receive our newest listings straight to your inbox. If you are ready to discuss your purchase goals, schedule a free consultation today!
Schedule Your Consultation Today
Rachael Holstein joined the Transworld Team in 2016 as Marketing Coordinator. Her working experience has been largely focused on Business Development and Marketing in the finance, architecture, property management, and information technology industries. A long time resident of Cleveland, Ohio, she attained her Undergrad from John Carroll University and a Master’s Degree in Global Interactions from Cleveland State University. She relocated to Denver in 2013 for a change of scenery and a bit of adventure.
If you liked this blog and want to receive more content, just like this, right to your inbox, sign up here!
