Buying a Business vs. Starting a Business

April 15, 2010

Everyone wants to be their own boss. Besides being already independently wealthy, one way to become your own boss is to have your own business. If you are thinking about taking the plunge, you may want to consider buying a business instead of starting one up from scratch. We will explore both options here.

Buying a Business
If you have a particular business in mind, you might want to contact a business broker. There may be a business on the market. Be prepared to wheel and deal and know how much you want to spend. If the broker is working on behalf of the business for sale, he will want to give THEM the best price, not you.

Some advantages of buying a business are that you have an idea of what you are getting into. You can look at their paperwork and know exactly how well the business is doing. Equipment and trained employees are already in place. The start-up work has already been done for you. However, if the business hadn’t been set up properly or poor decisions have been made, you could be inheriting a slew of problems. Also, current employees may get nervous at the prospect of a “regime change” and leave.

Starting a Business
Starting a business from scratch can be intimidating. There is a lot of government paperwork involved and it’s important to have a clear business plan. The clear advantage of starting your own business is that you get to create your own vision and make all of the initial decisions. However, going through all of the steps and purchasing equipment could be time consuming and costly.

The Small Business Administration is great resource if you are thinking about starting or buying your own business.