/Should You Buy A Business OR Start Your Own?

Should You Buy A Business OR Start Your Own?

There are many ways to get into the business world. Two options in front of you are either buy a business or set one up. When you buy a business, you are already taking over an operation that has been running successfully, while building a business means that you will face a lot of initial hurdles and possible failures. However when you build up your own business from scratch, you gain a certain pride that the business is your own idea.

Here’s a list of the pros and cons of both options.

Buying a Business

Buying a business requires you to purchase an already existing and successful business. When you take this option, you hit the ground running.

Pros

  • There is a system, brand, operation and a group of loyal customers already set and ready. Since you are not starting from scratch, you don’t have to waste a lot of time of setting up these things.
  • The business would already have broken even, so you don’t have to wait for profits to start pouring in.
  • Unlike a start up, buying a business is financially sound, since the business is already reaping profits (or has a plan to do so) and the business model is proven.

Cons

  • You need a bulk load of money which would cost even higher than starting a business. Buying a business is certainly even more expensive than starting one.
  • You may have an issue with how the previous owner ran the business and it may not fit with your usual methods. This means you’ll have to introduce a lot of revamps.

Setting up a Business

 Of the two, setting up your own business is more financial risky and has more chances for failing.

Pros

  • You are the sole owner and you can set up the business according to any vision you have. The design, the brand, the operations, etc. is all up to you.
  • Unlike when you buy a business, with this option you are not limited by anyone else’s rules, history or influence on the business.
  • Setting up a business is relatively less expensive than buying a business. This is because a start up needs small doses of money to get started.
  • Your business is most likely to utilize a blue ocean strategy and access an untapped market.

Cons

  • There are a lot of reasons your business can become a failure – idea is ahead of its time, market is saturated, poor response.
  • It will take time for your business to become profitable.

Which?

So which one do you choose? Ask yourself three questions.

–          How much experience do you have?

  • When you buy your own business, you hit the ground running, so you better have all the knowledge of what goes into a business already. In setting up your own start up, you have the time to slowly learn all the skills.

–          What kind of business do you want?

  • You probably already have a business idea or business vision in your head. Does the idea or vision already exist? If not, you’ve got to start from scratch and make it happen.

–          What kind of finance do you have?

  • You need to have a very strong financial backing to buy a business. However for a start up, you can slowly build it up on small dosages of your own finance or a large one in the form of a loan.

 

Original Source

Narissa is the Brand Advocate at @RapidBoost Marketing. She is enthusiastic about helping others and committed to educating clients and she takes the initiative to make change happen. With previous experience in the financial industry and as an Entrepreneur, Narissa understands what it takes to market and grow your business. She is a connector and advocate for small business in Edmonton, and you can always find Narissa on Twitter at @narissa_singh.