Advantages of Buying a Business
Buying a business can be a much greater option than dealing with the struggle and strife of establishing your own. With buying an already established business there are many advantages which will not become apparent until it’s too late.
N.B 80% of new businesses fails within their first 3 years.
Here are a few pointers of which you may not be aware:
No start up costs– this saves you some money almost immediately. Even though an established business may cost more originally you will hit the ground running a lot quicker and start making back money spent almost immediately.
Experienced and trained staff already in place-getting the right staff could be a mammoth task, inheriting people who know the company already can be priceless, an efficient system should hopefully already be in place and these staff will not need to put in the hours of training.
Knowledge is power– A lot of sellers care about their business still and will want it to progress after they have gone. You may ask the seller for their knowledge and if they oblige this could put you in an extremely strong position. Take a business like Manchester United, When Alex Ferguson retires in the coming years imagine the resources the new manager will have asking him about the club. You may find similar experience buying a business off someone who has maybe ran it for 25 years.
Disadvantages of Starting Up Your Own Business
Initial cost- With the branding and customer bases already in place for most businesses the price of sale will be accounted for within this. The value of branding to a company and their sales margins is explained really well here by Erica Swallow
Competitors- For progression in business it is important to be a little aggressive in the market but this can involve gambles. For a business just starting up unless you are incredibly lucky to find a niche which has little competition and money making opportunities you are going to have to become better than the competition. This can be hard to achieve and take years. Do not be totally disheartened as it can be achieved but the odds are stacked against new businesses.
Buying a company can be a risk in any case but can be much safer than starting one from scratch. However there comes a great satisfaction of starting your own business and watching it flourish. So the choice is yours but remember to consider both options carefully. This blog just scratches the surface – so research, ask plenty of questions and then and only then take the plunge.