Benefits of Starting a Business vs. Buying One
7 Benefits to Starting vs. Buying a Business:
Market Research Benefit when Buying a Business
Starting a Business Gives you Meaning and Skin in the Game
Faster Track when Buying a Business
Starting a business can be built on your personal preference and liking
Take Advantage of an Established Brand when Buying a Business
Acquiring an Established Business Gives you Access to More Capital
Building a Business Allows you to start your own Team
When you are interested in growing your wealth, it means building streams of income. Nothing builds income like becoming a business owner.
There are two tracks for owning a business -- either you build one or buy one. Both are attractive options, depending on what you want and what industry you're in.
Keep reading so that you can learn the benefits of starting a business, compared to buying one.
1. Buying an Existing Business Gives You the Benefit of Market Research
When you're weighing whether to run a new or existing business, consider your risk tolerance. If you want more of a sure bet, buying a business gives you the benefit of market research.
The company that you buy out can hand over documented research and analytics that you can immediately assess and build on. You'll also have built-in successes and failures to learn from, which will let you retool and leave your own mark on the business.
2. Starting a Business Gives You Meaning and Skin in the Game
Starting a business is often a heart-centered decision. For many people, starting their business is tied to finding their "why", which adds to the investment and meaning of the journey.
When you build your company from scratch, it has a large measure of meaning, and you'll feel compelled to fight your way through adversity. People often start businesses when they start thinking about legacy and long-term wealth.
3. Buying a Business Lets You Get Started Quicker
Consider your timetable for getting started. If you are interested in getting in the driver's seat sooner, purchasing an existing business is your best option.
When you're able to start your business quickly, you'll be more likely to make your company productive and profitable. It gives you a swifter return on your investment and lets you begin hitting benchmarks.
4. When You Start Your Own Business, You Build it Perfectly to Your Liking
Starting vs buying is an easy decision if you're big on customization. Building a business to your liking lets you control things down to the last detail.
When you decide to start your own company, you get to see an idea in your mind go from journal entries and vision boards to concrete plans, to a living, breathing reality and source of income. This is a reward in itself, and it gives you the courage and confidence to make other moves in your business life.
5. You Can Take Over an Established Brand
There's no substitute for piggybacking off of the work that someone else already put in. When a brand is trusted and established, you'll be able to quickly build a rapport with their customers.
This is why purchasing a franchise is such a common way that people begin building their wealth.
Being able to use the logo and trademarks of a company that people already trust and identify with gets you, customers, day one. This way, you'll be able to focus more on the work at hand and less on marketing and trying to draw new people in.
6. Purchasing an Existing Business Gives you Access to More Capital
The bank is always more willing to bet on the established brand. If you know that you're going to have to seek lending, you'll have a better chance of getting the funding that you need when you're purchasing an existing business.
When taking over someone else's company, you'll be able to present the bank with financial records for the past several months or years. An existing company also has assets that can be used as collateral.
The risk is lower for the bank, which means that the terms that you receive will also be more reasonable. By taking on a loan that you can easily repay, it frees you up financially to accomplish your goals for both the short-term and the long-term.
Make sure that you explore plenty of options when you're trying to find new lending opportunities.
7. Building Your Own Business Lets You Start Your Own Team
Consider what you are hoping to get out of business ownership. If you're a people-oriented entrepreneur, you will definitely want to put some thought into the team that goes on this journey with you.
When you're building your own company, you'll have more control over who is working for and with you. Taking over an established company is more difficult in this regard since teams are already in place from top to bottom.
By starting your own company, you'll be able to instill a company culture that carries on for years to come. You will know that you left your imprint on the business and that you had a strong influence on its direction and success.
Consider the Benefits of Starting a Business vs. Buying One
When you're thinking about the benefits of starting a business, the tips above will be helpful. Becoming a business owner is a dream that many people have. It's something that you can achieve as long as you have the right information and the willingness to follow through.
These points give you a glimpse of what's possible so that you can then decide which track you want to take. Whether you decide to purchase a business or start your own, make sure that you put together the best team of professionals, and seek help from those who have been in your shoes.
For more advice on buying a business and making entrepreneurial decisions, check out more of our blog posts.
Featured
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.