Which of the following is NOT a benefit of buying an existing business?

• A. Established brand recognition
• B. Guaranteed increase in profits without any effort
• C. Lower risk of failure compared to starting a new business
• D. Immediate access to established customers

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the context of the question. The problem is asking which option is NOT a benefit of buying an existing business. This requires evaluating the listed benefits and identifying the one that is unrealistic or incorrect.
2. Step 2: Review the first option, 'Established brand recognition.' Buying an existing business often provides the benefit of inheriting a recognized brand, which can help attract customers and build trust. This is a valid benefit.
3. Step 3: Analyze the second option, 'Guaranteed increase in profits without any effort.' Consider whether this is realistic. Profits depend on various factors such as market conditions, management, and operational efficiency. Guarantees without effort are generally unrealistic in business.
4. Step 4: Examine the third option, 'Lower risk of failure compared to starting a new business.' Buying an existing business often comes with established processes, customers, and market presence, which can reduce the risk of failure compared to starting from scratch. This is a valid benefit.
5. Step 5: Evaluate the fourth option, 'Immediate access to established customers.' Purchasing an existing business typically provides access to its customer base, which can generate revenue immediately. This is a valid benefit. Based on the analysis, the second option is NOT a benefit of buying an existing business.