Why Buying A Small Business Can Lead To Big Returns
More and more people are taking a stand against big global companies for many reasons. People are becoming more aware of the damage that these big companies are causing to the environment and the economy. There’s been a lot in the news about CEOs of big companies using their money for selfish gains as opposed to giving back portions of what they earn to help other people. So more and more people are shopping with small businesses, and because of this more people are creating their small businesses. Due to lockdown, more people have decided to create businesses alongside their day-to-day job as a source of extra income. As an investor you may think why would I want to buy a small business, but the fact that more people are choosing to shop with small businesses should be sending dollar signs from your eyes straight into your pockets.
People choose to buy from small businesses because they are more invested in the environment than big companies. Many small businesses choose to work with local companies to create their products meaning there is a smaller carbon footprint for their products. They are often sourced with the creators in mind. For example, they’re not using slave labour to create their products. Because small businesses are invested in the people who create and buy their products, they provide the consumer with a feel-good attitude after purchasing.
Having a small business does not mean having small profit margins. For small businesses that create their products and sell on a small scale means that they are more in control of their profit margins. Because they have a smaller consumer base and people shop with them for their ethical approach to the environment, people are more willing to pay a higher price for the care that is put into their products.
Another drawing point is as consumers, people buy into the background of the business. Thereby into the reason why the business was created and how the business uses local products and sources their products sustainably. Not all small businesses follow the same trajectory of local product sourcing, but they are still small which means a reduced carbon footprint and a reduced effect on the environment. People start small businesses because they are passionate about what they make and what they do, and the consumers see this and invest in their products.
As a business owner, buying a small business means that you’ve not starting a business from scratch. You will have an income from day one because the business is already established. Therefore you aren’t going to be at an immediate loss. As a business person, you will understand the difficulty of when your business is in a deficit however, this won’t be the case. The small business will have its returning customer base or even contract with clients that need to be upheld. There is also the bonus that securing extra finance for the business isn’t going to be a huge issue because the business is already established. Furthermore, there should be access to the business contacts, which means that the networking isn’t starting from scratch, the marketing isn’t starting from scratch as you are already buying an established business. If these aren’t reasons to do more research on how to buy a small business, then you’re making a big mistake.
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