Buying vs Starting a Business
Which is the Better Option?
Wondering whether to buy an existing business or start a new one? Read through to learn why the former is the superior alternative.
Buying vs starting a business
Are you wanting to own a business but don’t know where to begin? So many questions and options such as, “what should my business be?” or “should I buy a business or start one?”
These are all good questions! Let us help show you why buying vs starting a business is really the better option!
Starting a Business
While starting a business can seem like an enchanting idea, it poses several major disadvantages as opposed to buying one.
When you start a business, you must build it from the ground up. Starting from scratch is definitely not for the faint of heart. Here is a list of just a few of the difficulties you will face if you start a business from scratch:
Creating and keeping your customer base
Acquiring a patent if it’s for a product or novel idea
Hiring employees
Marketing your business
A large amount of capital is available
Not having an established reputation
Starting a business is very risky. Statistics show that about 2 out of 10 start-ups will fail.
When you are starting a business, you have to create your own value for your product or company, whereas part of buying a business that is already established includes purchasing their already established value.
Buying a Business
If you decide that starting a business is not the route you want to take, the better alternative is buying an already established business. Here are several advantages to buying a business:
Known brand—having a known or popular identity
Existing infrastructure
Employees who are trained
vendors who are already established
Existing funds
The business model that is proven and established
Existing customer base
Check out this video if you are looking to buy a website, eCommerce, an app, or SaaS Company
Buying vs Starting a Business
When buying a business you have a proven business model because customers are familiar with the business or product and are purchasing already. They have established customers.
Starting a business requires you to produce a proven business model as if it were a hypothesis. “My customer wants my product because of ABC.” This is what you are trying to prove.
Buying a business means you have trained employees meaning you can start immediately generating sales because you don’t have to waste your time on the training and hiring process.
These already trained employees will help your business to run smoother with their expertise and prior experience.
Starting a business means wading through piles of applications and interviews and then taking the time to train each of the employees you hire. You also will have to factor in a learning curve and be prepared to have a slow start when it comes to generating sales.
One Final Thought
When considering buying vs starting a business, if you really have your heart set on starting and developing your own, we suggest you first buy an established one to get a feel for how a business is run.
Once you have bought a business and have taken a few years to turn a profit and understand the nitty-gritty of the business world, then maybe consider starting your own.
While starting a business can at first seem inspirational or enchanting, we promise you will soon become disenchanted. When that untrained employee sets the kitchen towel on fire, you will think back to this post and wish you had instead bought your business.
Want to learn more about owning your own successful business? Contact us today to see how we can help.
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