**The Benefits of Starting a Business vs Buying an Existing One**
When it comes to making any new purchase, whether it’s a used car, a period house, or a refurbished laptop, the option to go secondhand is usually presented. Strangely though, this doesn’t seem to apply when budding entrepreneurs are looking for business ideas. This shouldn’t be the case, though. There are countless businesses putting themselves up for sale every day. Not all will provide buyers with great value, or even a viable business, but with a little digging and plenty of due diligence, you may be able to unearth a diamond in the rough. Whether you buy an existing business or start from scratch, both methods have their pros and cons. It’s worth looking at both options to know which will work best for you.
**Advantages of Starting a Business from Scratch**
– Rewarding experience: Creating a business from scratch can be very rewarding.
– Complete control: Starting from scratch gives you complete control over every aspect of your business.
– Flexibility: You have the freedom to build your company’s identity from the ground up.
– Fast-tracking branding: Building your company’s identity from scratch can solidify your branding in the minds of customers and help you market it in the long term.
**Advantages of Buying an Existing Business**
– Turnkey solution: Existing businesses offer a turnkey solution that makes it possible to start making money straight away.
– Established location, staff, and clients: Buying a business allows you to start conducting business immediately with an established location, staff, and clients.
– Contracts and professional relationships: Take advantage of contracts and professional relationships that the previous owners have already built.
**Considerations When Buying an Existing Business**
– Due diligence: Thorough due diligence is crucial to ensure there are no hidden long-standing problems with the business.
– Existing contracts: Delve deep into which contracts will be included in the deal as the main value of the business could be wrapped up in one particular contract.
– Historical debts: Be aware of the possibility of disgruntled creditors going after buyers of businesses for historical debts run up by the previous owners.
**Which Option is Right for You?**
Of course, one of the main benefits of buying a business is the speed at which you can start conducting business, with an established location, staff, and clients. However, while a new business may take longer to get started, there are advantages to having complete control over every aspect of your business. Both options should be considered by the shrewd entrepreneur to determine which makes the most sense for their particular situation.
**FAQs on Starting vs Buying a Business**
*Why would someone want to buy an existing business rather than start a business from scratch?*
Existing businesses offer a turnkey solution that makes it possible to start making money straight away. Those tough first few years are effectively skipped, leaving the new owners with supplier contracts, previous publicity, and a workforce already in place.
*What are disadvantages of buying an existing business?*
If you have specific ideas of what your business should be, you may feel constrained by the previous owner’s decisions. Also, if your due diligence isn’t thorough enough, hidden long-standing problems may arise after you’ve completed the purchase.
*What is a drawback to starting a business from scratch instead of buying?*
The first few years of starting a business are often the most difficult. You’ll need to find your feet quickly while simultaneously trying to keep the whole venture afloat. Be prepared to endure a fair amount of trial and error before your business starts to run effectively, too, which can sometimes be quite costly.
In conclusion, whether you decide to start a business from scratch or buy an existing one, consider each option carefully and weigh the pros and cons to determine which makes the most sense for your particular situation.
*Rick Smith* is the founder and managing director of Forbes Burton, with over 15 years’ worth of experience in the area of business insolvency. He is dedicated to helping businesses navigate challenging circumstances. Connect with him on [LinkedIn](https://www.linkedin.com/in/rsmithforbesburton/), [Facebook](https://www.facebook.com/rsmithforbesburton/), [Twitter](https://twitter.com/rsmithforbesburton), and [Instagram](https://www.instagram.com/rsmithforbesburton/). For more information, visit the Forbes Burton [website](www.forbesburton.com).
