Buyout of an existing running business seems to be less risky than starting a new business from the start. A business that is already running gives you immediate cash flow. There will be no setting up cost, hiring cost, marketing cost because there are already employees and existing customers / client base that are using your services / buying your product and also business reputation is already established. The disadvantage is that buying that business will be much more costly compared to establishing the new one. Getting finance for buying this business is lot easier and lenders will much more comfortable to lend for this business. The agreement is usually made on e stamp paper and once all legal hurdles are crossed then takeover will ensue and it will usually takes 6 months to a year to settle down in the business.