Buying a business vs starting up
There are different routes into running a business. Starting up
may sound hugely exciting, or it may sound terrifying - either way,
it's well worth finding out about how it compares to buying to
ensure you're choosing the best path. This guide looks at how
buying a business compares to starting up in terms of:
- The advantages of buying over starting up
- The disadvantages of buying over starting up
- Which is best for you?
The advantages of buying over starting up
When you buy a business, it's often easier to secure finance
from banks or investors than if you were starting up, as
buying is lower risk and an existing business already has an
existing customer base and proven market. As the business should
already be profitable, you get a salary from day one - unlike in a
start-up, where you may wait years. An existing business also
already has an established network of suppliers and employees and a
reputation, saving you the hassle of building these up.
- Easier to secure finance when buying
- Buying gives you a salary from day one, unlike starting up
- Buying provides an established network of contacts
The disadvantages of buying over starting up
Buying a business is typically more expensive than starting up,
and most of the overheads will be fairly inflexible. You may find
it restrictive or frustrating playing out someone else's plans, and
you may find existing staff and customers resent a new boss and any
change you want to bring with you. Buying can be a very long
process, with lots of legal and other professional fees involved,
and once you're running the business you may discover lots of
problems that threaten success.
- Buying is more expensive
- Buying can be more restrictive than starting up
- Existing staff and customers may be resentful of change
- Buying can be a long process and the business may carry
problems
Which is best for you?
If you're passionate about a particular product or type of
business and you feel confident starting from scratch, starting up
may be for you. If, on the other hand, you'd prefer to run a
business which is already established without the drama
of building up everything within it, buying may be for better. Of
course, the choice also depends on whether you can afford to buy
and on what kind of business you want to run - figure out how much
money you've got and what business you want to run before making
any big decisions.
- Passion and confidence in a new idea may be better suited to
starting up
- If you don't want the work of starting up a business, buying
may be better
- Figure out what your budget is and what you want to
do before making a decision
To help you along, we've created Smarta Buisiness Builder, the one place where
you can find all the tools you need to start developing your
business.
Smarta Business Builder
To help you on your business journey, we've
created Smarta Business Builder, the complete online
tools package for growing your business. Website, Business
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