New business owners need to make a choice – should they purchase an existing business and help it grow, or should they start their own business from the ground up? This seems like it would be an easy question to answer, but all too often, the answer is far more complex. There are pros and cons to both options, which new business owners will need to consider before they make a decision.
Amount of Time Until Profitable
How long will it take for the business to be profitable? Building a business takes time, so it might be a longer period of time before the business starts to show significant profits. This does depend on a variety of factors, like the expenses getting started and the products or services the business offers. An existing business may already be profitable, but not necessarily. The business may be for sale because it isn’t doing well. If that’s the case, it is possible for the business owner to get the business to be profitable again. Yet, it’s not quite the turn-key investment the business owner might have hoped for, and the business won’t be profitable right away.
Amount of Control Over the Business
Once the business owner is in charge of the business, they can change anything they’d like. However, they may want to be careful with what they change. If the business is already established, they likely won’t want to change the name or the branding. This limits their control over the business somewhat, though these might not be too much of a concern. When the business owner decides to start their own business, they do have more control over the name, the branding, and more. However, the downside here is that they may not know what will work best, since the business is new.
Marketing Concerns
Marketing is yet another concern to be aware of. New business owners who purchase an established business will likely want to stick with the current marketing plan, at least for a little while. If the established business doesn’t have a marketing plan, they may have to get one up and running fast. If the new business owner decides to start their own business, they’ll need to start from the beginning with the marketing plan. This can be a hefty up-front expense, depending on what the plan entails and how quickly they want the business to become established online or in the local area.
Starting a new business is not easy, but neither is taking over an existing business. Both are going to have their pros and cons, so new business owners need to think carefully about what’s more important to them and how much work they want to put into the business to get it to be profitable. By taking the time to consider both options, they can determine which one is right for them in their current situation and which one might help them reach their personal goals faster.