June 11, 2007

Buying an Existing Business Or Start Your Own?

The truth is either option may be right for you. You will have to examine the pros and cons of both and determine what works best for you and your situation.

Different situations both in your life and in your personality should determine what route you take, if any at all. Remember, the better decision you make, the better chance that you will have to succeed.

Current Job Situation

The current job situation that you are in should be a deciding factor when you decide to start a business or buy a business.

Existing Business- An existing business is the best option if you do not have the money to maintain a business and your personal life until the business become successful. Since an existing business should already have a client base and profits, then chances are you will not have a problem sustaining yourself on the money that is made from it. You should be able to quit your job relatively quick, provided that you find a company that has already passed the new phase, has a good client base, and is showing profiles.

New Business- New businesses typically take a minimum of a year to become profitable. Until then, you will have to have the money to not only sustain the business, but your personal bills as well. If you do not have the resources available to do this, then chances are you will not be able to quit your current job. A new business should only be an option if you have the money for a year, or possibly more. You will have to keep your job for some amount of time. Having 2 jobs, especially one that relies on your for success can be a very stressful situation, so be sure you are ready and up to the challenge. The rewards are great in the end.

Patience

Existing Business- An existing business should already have everything, and take very little effort to get up and going once you complete the sale. This means that profits will come in much faster then if you were to start a new business. If you do not have the patience to let a business grow, then buying an existing business is the best option for you.

New Business- most new businesses take a minimum of one year to start showing the first signs of profit. This means that you will have to have a great deal of patience. However, the satisfaction you get from starting your business from scratch is well worth the wait.

Your Local Area

New Business- The first step in making a new business is deciding what interests you and how you could use that interest to gain profit. This can cause problems, especially if the area in which you live in already contains a business similar to the one you are wanting to start. You may have to consider moving to a new location, or changing what you want to do in order to suit the area in which you live. Starting a new business gives you this opportunity.

Existing Business- If your roots keep you where you are, then it may be a good idea to start looking the businesses in your local area. Are there any for sale? Is there anything that interests you or catches you eye? Buying an existing business ensures that you will be able to sustain that business in that area, mainly because it is already being done. You will not want to buy an existing business if you plan on relocating it.

Stamina

New Business- A new business not only takes patience, but it takes a great deal of stamina as well. When you start a new business, your who life will change. You main focus will be getting that business of the group, because chances are that you will not succeed unless you do so, and not all businesses succeed at all. You will have to deal with let downs, especially if your business takes longer to become profitable then you expected. You may have to work on your business for 18 hours a day. You may have to work harder then you expected. These are all factors that you should consider.

Existing Business- Since an existing business already have the structure it needs to be successful, you will need much less stamina. You will only need the time and effort to maintain what is already there

2 comments:

Alicia Allen said...

I plan on running my own business soon, so I'll have to bookmark this post. It'll be tough and challenging (though hopefully rewarding in the end), and I can use all the help and advice I can get. Lately I've been thinking about buying a business instead of starting one from scratch. Maybe a franchise? I'm not entirely sure yet. Do you have any other advice or suggestions? Thanks so much.

L. Edwards said...

@Alicia -- If you're thinking about buying a business, I know there are websites you could browse for more info. There's one called BizTrader.com, which is an online global marketplace where you can buy or sell a business. It has a lot of helpful advice and tips, and you can also use it find a lender, broker, etc.

You can also check out small business groups in your area. They can also be very helpful, and it's always good to network.

Good luck!