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Buying vs Starting a Business: Which is the Better Option?
If you decide that starting a business is not the route you want to take, the better alternative is buying an already established business.
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.
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.
5 Reasons Why Buying an Existing Business is Better Than Starting One
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up. Take heed to these tips so that you're able to build your business portfolio.
Do You Want To Buy an Existing Business?
5 Reasons Why It is Better Than Starting One
There are a few reasons why buying an existing business is better than starting one. Use these tips to choose what's best for you.
Purchasing an existing business is one of the best entrepreneurship opportunities available for you to build wealth.
It already has employees who understand how to run the business. Also, your employees are everything because they're the ones that keep your business afloat.
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up.
Take heed to these tips so that you're able to build your business portfolio.
Branding is everything, and franchise opportunities are ripe for the picking today.
You can grow your wealth by buying an existing business, and it may have advantages that are greater than you'll enjoy by starting from scratch. If you're thinking about buying a company and want to know the benefits, consider the points below.
1. You're Taking Over a Company That Already Has Cashflow
Purchasing an existing business is one of the best entrepreneurship opportunities available for you to build wealth.
Generating income is always a process, and it can take years for a brand new company to become profitable. By stepping in and getting cash flow on the front end, you can strategize on how to grow the company, rather than just trying to how to make it survive.
2. Getting Your Hands on Financing is Much Easier
Lenders don't like risk.
When you buy a company that is already established, you dramatically reduce risk, and this makes you more attractive to financial institutions. You'll be able to get a loan with interest rate terms that are fair and affordable.
3. You Don't Have to Get it off the Ground to Begin Bringing in Income
When you're just launching a business, you'll have to spend a great deal of money on equipment, licenses, permits, branding, legal fees, and so much more.
Since you don't have to handle these sorts of expenditures, it frees up more money than you can re-invest into the business. This way you're focused on growth, rather than just trying to break even.
4. The Core Customers are Already in Place
You'll also have established customers to serve and market to when you buy a franchise.
It's much easier to expand on an established base that you have data on than trying to start from scratch. You're doing business with people that already trust your track record and understand the brand.
You'll also inherit all of the trademarks that the company has in place, along with all of the brand equity that comes with it.
5. It Already Has Employees Who Understand How to Run the Business
Your employees are everything because they're the ones that keep your business afloat.
When you buy a franchise, you're also getting access to employees that are used to running the business on a day-to-day basis, and they understand the policies. It's easier to add your own influence and add new policies, rather than building from the ground up.
Simply put, your risk isn't as great when you opt to buy an existing franchise as opposed to building a business from the ground up. This lets you begin generating money on your terms.
Consider These Points When Buying an Existing Business
So there you have it. Buying a business can help you out in so many ways. Take heed to these tips so that you're able to build your business portfolio.
Consider these tips when buying an existing business, and don't hesitate to check out more of our posts on taking advantage of franchise opportunities.
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.