The majority of folks looking to start a business often think of starting from scratch, especially in terms of “constructing” the building. However, there are some serious disadvantages to this, including the problem of building clientele, advertising your business, hiring employees and instituting a cash flow without any track record or reputation to help you along.
You might be wondering if you should purchase an existing building or build one of your own. Well, this will depend on your available resources, skills and personality.
What Does Buying From Scratch Mean?
To start from scratch means exactly that. You have to come up with an idea for a business. You have to construct your building, outfit it with utilities – electricity, water, gas, telephone, etc. – and so much more. You’ll also have to establish yourself a reputation and make people know about the new location in town.
Starting from the ground up will get you noticed – especially from the construction going on. However, until your business is open, nobody will know what is being constructed and you still have cost to deal with.
It can be extremely risky to create your business from scratch. There is no guarantee that once you open your doors that you’ll break even in the first year, and even the second year too.
What Does It Mean To Buy An Existing Business?
When you purchase an already-established business, it’s far less risky than you beginning a business from scratch. After all, buying a business means you take control over a business that’s producing income with an established client base and reputation. You also have employees who know the ins and outs of the business. You don’t have to create anything since the formula already in place is successful.
Of course, the disadvantage to this option is that it costs more to buy a business than it is to create one from scratch. Still, it’s typically easier to attain financing for an already established business than with a new one. After all, investors tend to be comfortable giving money out to a business that’s got a proven track record.
When you purchase a business, you could be giving away valuable legal rights like copyrights and patents. But, if you’re not careful, you may get stuck holding inventory that’s no longer in date, out of date distribution methods, or employees who are not happy with the transition and rather uncooperative.
How can you make the best deal possible for yourself with the purchase of an already established business?
Choose The Right Business For You
If you’re going to purchase an already-established business, you should pick one that’s best for you. What industry are you familiar with and understand? Be sure you think deeply about it and find something that fits your experience and skills. Look for a business size you’d be happy with as well as the location. Look at the labor and costs of the business in that region – taxes and wages.
Look to the local paper for business opportunities to buy or run your own ad detailing what it is you want. Remember, some businesses may be for sale, even if they’re not listed. Use your networking abilities and contacts to find yourself a business to purchase. Or, get in touch with a business broker who can help you locate businesses for sale. A broker can be a worthwhile asset and expense in your search for a business to buy.
The experience of becoming an entrepreneur doesn’t have to be time-consuming. However, you should do a little research and think carefully before you settle on building from scratch or buying an existing business. Once you do that, you can then proceed with whether or not it’s something you should do full-time or part-time.
