What's Your Best Option? Buying a Business vs. Starting Your Own
While the appeal of seeing years of dedication and hard work come into fruition may be apparent, building your own company from the ground up comes with no short supply of challenges.
Buying an already-established business may not come with the innate gratification of a self-made business. But it offers some advantages that make the option worth exploring.
If you're struggling to decide between building your own business or buying an already-established one, allow the following comparison to aid your decision. This is not a topic you want to be uninformed about.
Starting from Scratch
There is no doubt about the satisfaction associated with being a successfully self-made entrepreneur. The world's currently unstable economic status means many people are being driven towards self-reliance and financial independence.
However, building up your own business from scratch presents many disadvantages compared to buying a pre-existing business.
- No Client Base
Starting your own business means that your client base does not exist yet. Introduce yourself to clients and ensure that you stand out from your competitors to win loyalty.
- Longer, Harder Hours
Starting your own business means carrying the weight of your business entirely on your own back. It will take a while to find the right staff members for your team, and until then, you'll have to fill in all the gaps.
- Low Compensation
Putting in long, hard hours into your business is one thing, but not receiving an equivalent salary at the end of the month is another. Not getting compensated appropriately in the initial stages can make the effort more challenging.
Buying an Established Business
Buying a business that has already made it through the first few years of development makes a lot of sense. Especially when you consider stats show that an average of 90% of start-ups fail.
A business that's made it through the first few years will have an experienced team of staff members, proper HR and accounting systems in place, and operational policies and procedures. It will also have an existing customer base.
There are fewer risks involved because you can track the history and trajectory of a company before deciding to buy it. Whereas starting a new one will mean taking a gamble on its success.
Your target market already knows who you are, and you can place your focus solely on continuing where your predecessor left off. If you have the financial means to buy a business instead of building one from the ground up, the former is a more reliable route to success.
While it may seem clear that buying a pre-established business makes far more objective sense than starting a new one, the world wouldn't have gotten very far if it never deviated from the norm.
Starting your own business is certainly a challenge, but a worthy challenge if you have the perseverance to see it through.
Your choice of which direction to take really should depend on what resources you have access to, and what you want to get out of the experience.
Financial success is more likely to come quickly if you can afford to buy a business. However, the personal satisfaction and pride that comes from starting your own is only found through independent development.