Hope your New Year is off to a great start! As you’re looking to make 2017 a year of prosperity, have you set your sights on becoming a business owner? If so, you’re probably wondering whether buying an existing business or starting your own company will offer the best chances of success.
Both have their advantages and challenges, so how do you choose? I wish there were an easy answer, but I’m afraid you’ll need to do some research and put some serious thought into your decision. As you explore your options, consider the following pros and cons of starting a business from scratch and buying an established one.
Pros Of Starting From Scratch• You begin with a squeaky clean slate, establishing and building your brand reputation from Day 1.
• You build your team fresh and new, selecting the right people for the right positions.
• You create your workflows to maximize productivity, without having any inefficient past processes to “fix.”
• You choose and develop the products, services, and packages you’ll offer to your customers.
• You establish your pricing to ensure profitability from the start.
• You choose your business’s legal structure to ensure the degree of liability protection you need and the most favorable tax situation.
• You have employees who already know how to do their jobs and don’t need training.
• You have built-in processes and systems to operate your business efficiently.
• Your services and products are already to market, and you have established sales channels to get them into customers’ hands.
• Your business is already registered and has the necessary permits and licenses to operate legally in your state.
Cons Of Starting From Scratch• You do all the legwork, including researching the registration requirements to form an LLC or incorporate your business and filing your state, federal, and local paperwork to operate legally.
• You don’t know for certain that your business idea will be viable and sustainable.
• You have to develop and put into place all the internal systems and processes needed to operate your business.
• Existing employees may be resistant to accept your leadership.
Cons Of Buying A Business
• If you find processes aren’t working efficiently, it may be difficult to initiate change because everyone is used to doing things a certain way.
• You may discover the legal business structure the former owners selected isn’t ideal.
• You may find your brand’s reputation isn’t as positive as you’d like it to be—that might be difficult to turn around.
As you can see, there’s a lot to think about as you weigh the options of starting your own business or purchasing one that is already up and running. I advise you to do your homework before deciding which route to travel. And consider seeking the guidance of respected and reputable professionals (attorneys, accountants, business consultants, etc.) who can help you understand the financial and legal aspects of what’s involved.