In 2022, more than 815,000 new businesses were started in the USA. Unfortunately, over the next 10 years, more than 90% of these will fail. Buying an existing business rather than starting one from scratch offers numerous advantages, making it a compelling option for aspiring entrepreneurs. This article presents a concise overview of why purchasing an existing business is often a wiser choice.

Acquiring an existing business provides a head start regarding the market presence and customer base. By purchasing a business with an established brand, loyal customers, and a proven track record, you bypass the challenges of building brand awareness and acquiring customers from scratch.

This translates to immediate revenue generation and a reduced risk of failure. Additionally, an existing business often possesses valuable intangible assets like patents, trademarks, and copyrights, which can enhance its competitive advantage and profitability.

Existing Systems

Buying an established business grants access to a ready-made infrastructure and operational systems.

Starting a new business entails developing processes and systems from the ground up, which can be time-consuming and error-prone. By purchasing an existing business, you acquire a functional infrastructure, including physical assets, equipment, supply chains, and well-defined workflows.

This lets you focus on growth strategies and optimizing operations rather than dealing with the initial setup complexities.


An existing business has a financial track record that provides insights into its performance and potential profitability. When starting a new business, forecasting revenue and estimating expenses can be challenging and uncertain.

With an established business, you have historical financial data that can guide your decision-making, aid in securing financing, and attract potential investors. This evidence of past performance also instills confidence in lenders and reduces the perceived risk of a new venture.

Purchasing an existing business often comes with an existing team of employees who possess valuable industry knowledge and experience. Unlike starting from scratch and hiring a new workforce, acquiring an existing business allows you to retain and leverage the expertise of existing employees.

This ensures continuity in operations, minimizes training costs and facilitates a smoother ownership transition. Furthermore, the existing employees can provide valuable insights into the business's operations, customers, and industry dynamics, aiding in strategic decisions.

Cash Flow

Another significant advantage of buying an existing business is the potential for immediate cash flow. Rather than waiting for a startup to gain traction and become profitable, purchasing a business already generating revenue allows you to start earning income from day one.

This can be crucial for covering operational expenses, debt repayment, or reinvesting in growth initiatives. The cash flow generated by an existing business can also provide a steady income stream, reducing personal financial stress during the early stages of entrepreneurship.

Risk Of Failure

Lastly, acquiring an existing business reduces the inherent risks of starting a new venture. Starting a business from scratch involves a high degree of uncertainty, market validation challenges, and the risk of failure.

Buying an established business with a proven business model, such as an Amazon Business, a customer base, and an existing revenue stream reduces the risk and uncertainty significantly. While risks always exist in entrepreneurship, acquiring an existing business mitigates some risks and increases the likelihood of success.

Purchasing an existing business offers compelling advantages compared to starting a new one. By acquiring a business with an established market presence, operational infrastructure, financial track record, experienced employees, and immediate cash flow, you can bypass many of the challenges and uncertainties associated with starting a new venture.

Ultimately, buying an existing business provides a solid foundation for growth and success in the entrepreneurial journey.

Tax Advantages of Long-Term Care Insurance for Business Owners

When you purchase an existing business, you can take advantage of tax advantages by having the company purchase Long-Term Care Insurance on your behalf.

  1. C corporations can generally deduct 100% of the premium.

  2. S corporations, LLCs, and other types of organizations can deduct most or all of the premium.

  3. The business can legally purchase a policy only for you and your spouse, without making it available to other employees.

  4. You can also select "key" employees and offer this benefit as well.

These tax advantages can help you save money on your Long-Term Care Insurance premiums, and they can also help you ensure that you have the financial resources you need to pay for long-term care in the future.

To be eligible for the tax deduction, the Long-Term Care Insurance policy must meet certain requirements. The policy must be:

  1. Qualified under the Internal Revenue Code (meets guidelines under Section 7702(b).)

  2. Purchased by the business for the benefit of the business owner or key employee.