Starting a business from the ground up can be an exciting and rewarding experience, but it also requires a lot of hard work and dedication. On the other hand, buying an existing business can be a great way to get a head start in the world of entrepreneurship. But which option is right for you?Buying an existing business is almost always more expensive up front than starting your own. However, it's also easier to get funding to buy a business than to start one.
Lenders and investors are much more comfortable working with a company that has a proven track record. When you purchase an existing company, you're not only buying the tangible assets, but also the intangible ones such as good will. All of these assets come at a price, and you may need to seek additional funding or investors, which could cause you to start with a considerable amount of debt.Mark Zweig, resident entrepreneur at the Walton School of Business at the University of Arkansas, compares buying an existing business to renovating a house instead of building one from scratch. While entrepreneurship gives you the freedom to be your own boss, it also takes a lot to build your brand.
If the idea of creating a brand from scratch seems daunting, you might want to explore the possibility of buying an established business. Starting from scratch has some clear disadvantages, such as the difficulty of building a customer base, marketing the new business, hiring employees and establishing cash flow. When you take charge of an existing business, it's about building on what already exists, but you have a foundation to work from. If you like to create things from scratch, you probably don't want to take care of the business that someone else already has. Ultimately, it's important to weigh all your options before making a decision. Buying an existing business can be very expensive but if you have the necessary capital and do your due diligence beforehand, it could be your ideal solution.
Aspiring entrepreneurs should consider both starting their own business from scratch or buying one that already exists.
