Should You Buy an Existing Business?

Should You Buy an Existing Business?

Starting a business can be done in two ways: starting from scratch or buying an existing business. But which one is best? Here are some advantages and disadvantages of starting a business from scratch and buying an existing business so you can weigh up your options.

Starting a Business From Scratch

Starting a business from scratch could be the dream of many, but have you considered the problems you may encounter?

Advantages

  • You can create the business to be exactly what you want.
  • You get to build the company from ground up.
  • If you have a limited amount of money you can start out small.

Disadvantages

  • You need to put a huge amount of research into your idea before going ahead, for example: Is there a market there? What are your competitors doing?
  • Are you willing to put a huge amount of time into your business?
  • It will take longer to see the results of your business.
  • There is a risk of failure – according to Forbes 90% of new startups fail.
  • You’ll have to get the word out about your business, which can be difficult.

Buying an Existing Business

If starting a business from scratch isn’t for you, consider what goes into buying an existing business. Here are some advantages and disadvantages to buying an existing business:

Advantages

  • The business is already up and running.
  • Easier to get finance for an existing business than starting one from scratch.
  • There’s already a customer base established.
  • Existing employees will have experience in the business.
  • You may be able to have the previous owner stay on to train you up.
  • There may be contracts already implemented.
  • You’ll be able to see results quicker.
  • You’ll be able to look into the previous accounts, so you will be able gain an estimate of what figures to expect.

Disadvantages

  • You more than likely need to invest a large amount of money up front.
  • Current employees may not like the thought of a new boss.
  • The previous owner many have create a bad reputation for the business.
  • You may have to honour any outstanding contracts.

Looking for a business to buy? Have a search of our businesses for sale to find your perfect business.

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