Buy a Business or Become an Entrepreneur
If you want to own a business, there’s basically two ways to make that dream come true. You could buy an existing business or start your own business. Each path has challenges and each opportunity. But, which one is right for you?
Cost Vs. Risk
Typically, buying a business involves more upfront costs than starting your own business; however, there may be more risk starting a new business from scratch. With an existing business, you can see through financial records how the business has been performing and can potentially spot areas for improvement based on this historical data. With a new business, you’re starting with a clean slate and a lot of unknowns.
Face New Challenges or Improve Upon Old Rules
Building a business from the ground up, you may have the disadvantage of having to build up a customer base, figure out the marketing, hire employees and establishing cash flow. With an existing business, your expertise in tweaking the marketing, managing the employees and improving cash flow can come into play in order to increase profits. Which sounds more compelling to you?
Getting Financial Help
When buying a business, it can be easier to get financing help than when starting a new one. Bankers and investors often feel more comfortable when working with a business that already has a proven track record. However, should your businesses name be “mud” in some financial circles – whether debts haven’t been paid, vendors aren’t receiving payments or employee’s checks are late, these challenges may prove to be more devastating than trying to get credit with no business credit history.
Uncooperative or non-productive employees can also be a hazard when buying a business. Owners who are looking to sell their business may not have wanted to upset the apple cart and overlooked “problem employees” or written off their behavior or attitudes because replacing them would have involved more effort. However, on the flip side – if you’re starting out on your own with a new business, finding the right talent, interviewing and setting up payroll, benefits and managing an entirely new set of employees can present an equal amount of challenges.
While these few issues only highlight a couple of the key points to consider when determining if it’s best to start your own business or purchase an existing business, it’s an attempt to shine light on the challenges ahead, no matter which path you decide to take.
While exciting, both opportunities do present their own unique set of challenges. Should you need help determining what type of business is right for you, buying a business or even selling your business, please reach out to Cress Diglio for a consult.
Cress V. Diglio, Florida Business Broker
Cress V. Diglio is a Certified Business Intermediary (CBI), a Merger & Acquisition Master Intermediary (M&AMI) and the Past Chairman of the International Business Brokers Association (IBBA).
Whether you are looking to buy a business, sell your business or merge with another business, Florida Business Broker Cress V. Diglio has the experience to assist you in all facets of the transaction. Call Cress today for complete transaction support and expertise, 888-984-4208, or visit https://floridacertifiedbusinessbroker.com.