You can envision yourself at the helm of a business, but there’s more than one route to becoming an entrepreneur. You must next ask yourself: Is it a business you started or an existing business you took over? Some people have a strong preference on whether they’re running a company they shaped from the ground up or an established organization to which they have picked up the reins. Many others are flexible on such a point, as long as the arrangement fits their goals and strengths.
As you can imagine, there are a host of upsides and challenges worth considering for both arrangements. Here are a few points to consider when you’re asking yourself whether you should buy a business or start your own.
Advantages of Starting Your Own Business
There are plenty of reasons why starting your own business is a worthwhile endeavor.
You maintain total control from the get-go.
Are you someone who likes things a particular way? Do you have principles and ideals on which you find yourself unwilling to compromise? If so, the option of starting your own business may appeal to you. As the U.S. Chamber of Commerce notes, starting your own business gives you unprecedented control over the brand from day one. This includes important attributes like website appearance and function, brand personality, marketing strategy, product lineup, and more.
You start with a blank slate.
Existing businesses often already have reputations among customers, for better or for worse. But launching a brand-new SMB means you’ll start with a blank slate, meaning there are no pre-conceived notions about your brand floating around. Rather than having to change or manage people’s perceptions about a company they already know, you get a rare chance at a true first impression — done your way, based on your business objectives and management style.
Advantages of Buying an Existing Business
There are a few compelling reasons for thinking about buying a small business.
Existing businesses have a track record.
Whether or not to buy an existing business is a decision you can make with plenty of context, as you’ll be able to see the performance history and its trajectory over time before committing. This allows you to make sure you’re buying a business that has its legs solidly underneath it rather than taking a chance on a new idea.
Skip the riskier start-up stages.
It’s a general rule of thumb that businesses tend to struggle most within their first few years — and that the chances of failure are higher in the beginning than they are if a business can outlast this tumultuous early period. Case in point: The U.S. Small Business Administration estimates that one-third of businesses don’t make it two years, but that after the first couple “volatile years,” the failure rates decrease. So, you could safely say it’s riskier to begin a totally new venture than it is to improve an existing one.
Enjoy a built-in audience.
Depending on the type of business you acquire, you may already have a sizeable customer base built in. Now, whether they stick around after the change in management is a different matter, but at least you’ll have a list of email addresses, purchase histories, and social media follows to incorporate into your strategy.
Only you can decide whether it’s more prudent to buy a business with the aim of maintaining and improving it or to start your own organization from the ground floor. Consider which of these advantages make most sense to you as you navigate this decision-making process. There are valid reasons to go with either option, but it will depend mostly on your entrepreneurial objectives and style.