The new generations of entrepreneurs taking more risks and opting for different innovative business ideas for their business growth and development.
They are buying existing businesses and also starting new ventures either on their own or partnering with other entrepreneurs. Seasoned business people show more interest in buying an existing business but some exceptions could be found here too.
There is also a debate on whether to buy an existing business or start a new one. Which one could fetch more benefits? Which one could help to expand in the market quickly?
For more information on this matter or to know the titbits of business laws, taxation issues, and procedures of buying an existing business, or starting a new one, it’s always feasible to take the help of experts in the respective domains to ease the process.
Pros and Cons of Starting a New Business
Let’s talk about the pros and cons of a new business and to what extent it can help in the professional growth and development of an entrepreneur.
1. Pros of Starting a New Business
- Starting a new business means everything is new including the product or service you are going to offer, the technology, the market, and your operational process. You have the full freedom to expand anywhere, plan innovatively, and penetrate the market as per your target.
- Starting a new business means complete independence. Entrepreneurs are their bosses. They make their own decisions including how the engagement of employees, hours of work, planning of business procedures, and everything related to business.
- Designing a product or service is rather easy and fully in your control. You can flourish your thoughts to any extent.
- You create wealth for yourself. Nothing is as satisfying as creating your wealth from scratch. It may be slow initially and take some years, but once established, you witness the steady flow of money for the rest of your life. Some of the world’s wealthiest people today have started their businesses from scratch.
2. Cons of Starting a New Business
- With a new business, uncertainty is limitless. There is no surety of success in the market. Again, there is no surety of success in all marketplaces across the state or country. Trial and error would be an ongoing process during the initial years.
- Risk is always high in every step, especially during the initial days since you have no idea how your product or service will perform in the market. You might have some useful data on competitors already working in the market depending on several variable factors.
- Risk is higher when you bring a completely new product or service that the consumers have never used or experienced before. You never know how the consumers will react to this new product or service.
- The financial commitment is always high when you are venturing for the first time. No matter how small you start, you need a good amount of initial investment. There are various other expenses as well. During the initial years, you may not find any profit. For growing you have to spend money on employees, office and factory maintenance, buying equipment, market research, product design, and many other reasons. You cannot expect any return from those investments. It’s hard to predict how many days, months, or years you have to compromise.
There are both pros and cons to starting a new business. Overall, it’s challenging for an entrepreneur who never deters to accept a new challenge. It’s risky in the sense that everything would be new to you.
Pros and Cons of Buying an Existing Business
Starting a new business means beginning from scratch- planning every little step and implementing the plans as perfectly as possible. Developing ideas and companies from the base takes much effort and time.
There remains a high risk of failure which means starting several aspects of the business from scratch once again. Trial and error is part and parcel of starting any new business. If you are worried about all these things and do not want to take that level of risk, you can consider buying an existing business.
1. Pros of Buying an Existing Business
- You do have not to think about any new product or service as the existing business already has it. You may like to change some parts of it like the design of the package, the shape of the product, or add some more utilities but it’s not as hard as starting from the beginning.
- You will get an established supply chain. This is something highly important for a business. It takes lots of time and hard work to develop a supply chain with trusted vendors.
- The business you are planning to buy might have an employee base. You may not have to start recruiting from scratch.
- You can utilize the already existing customer base of the business and expand it further with some new strategies.
- You can easily introduce the product or service of the business you are planning to buy for your existing customers.
- An existing business might have a certain operational process. You do have not to change much or not change at all depending on the current condition of the business.
2. Cons of Buying an Existing Business
- Buying an existing business means a lump sum investment in the beginning. Starting a new business is much cheaper than buying an existing business.
- If you are not knowledgeable enough regarding the business you are planning to buy there remains a high chance of getting stuck in different aspects of the business.
- On many occasions, it is found that existing employees start uncooperating in anticipation of the termination of their employment.
- If you are not careful enough, you may end up with obsolete technology, systems, and inventory.
- Once again, if you are not careful enough in researching the market reputation of the business, you may end up buying a business with a bad reputation. This might hamper your existing reputation as well.
That means, buying an existing business also has several types of risks, impediments, and drawbacks. You should undertake intensive research before making any decision. Thanks to the internet.
You can get more and more information about business from different online sources including highly popular social media platforms, online business news networks, and discussion platforms these days.
It is highly unlikely that you would be able to acquire a problem-free existing business. If there is no problem, then should the owner or management decide to sell it? It’s always feasible to take expert assistance while buying an existing business.
Existing Business or a Start-up?
Both have their respective pros and cons as we discussed so far. Starting a new business means creating everything from scratch. It’s wonderful to see your hard work is obtaining results or the market is embracing your concept slowly but steadily. Buying an existing business and expanding its market with a new strategy is also very satisfying.
However, both need hard work, perseverance, and immaculate strategy. Both are challenging for any entrepreneur. You have to decide which one would be suitable for you considering your present financial strength, risk-taking ability, manpower, knowledge of the business, and competence.
