Managing your own business hosts a number of unique opportunities and the potential for success. While starting your own original business is a common procedure, you may also want to think about instead purchasing an existing business and taking over operations. Both options have benefits and downsides, so it’s important to consider all your options and determine what is best for you and your ideas.
Starting A Business
Perhaps the most compelling aspect of starting up your own business is the prospect of complete autonomy and ownership. Building a business from scratch means that the ideas, organization, structure, and process are all your own. This sense of leadership and power can certainly be tempting. As long as you understand the responsibilities of a business owner, the management of your new business should be relatively clear-cut.
If you start your own business, you will be building from the ground up, which means you will not have any pre-existing mistakes or hurdles to fix, and the issues that do arise should be manageable, seeing as you should be able to identify the factors that lead to any errors.
Of course, if managing a startup were easy, everyone would do it. There are a number of barriers and obstacles you will face if you decide to start your own business. The work you have to put into a new business is immense, and unless you’re fully prepared to tackle it with a lot of effort, you might want to hold off on the endeavor.
For some, the financial burden is also a large deterrent. Unless you’re already wealthy or you’re fully determined to devote a significant amount of time fundraising, the process of procuring funds can be challenging. Relying on investors is a typical course of action, but this tends to mean that those investors wield some control over your business. If you’re willing to sacrifice some authority, then this won’t be too much of an issue, but finding investors who want to support your budding business may be tricky, too.
Buying A Business
Known as the process of entrepreneurship through acquisition, buying an established business can also prove favorable. Taking this course of action means surrendering some control, as your business will be an inherited one rather than an original; that being said, if you’re willing to take over a business, utilize their success, and work to improve sales or organization, you should consider buying a business and using their success as leverage for your own reputation.
It’s important to identify a good, profitable business before you buy; researching its history, its clientele, and its organization can help you determine if buying the business will be profitable. Repeat customers and a steady income are often signs that a business is successful and will continue along a similar path in the future.
As long as you devote a significant amount of time an energy to research, you will be able to use an established brand to your advantage. Most of the time, buying into an existing business means they have worked to create their brand and have overcome some of the obstacles that face new businesses. This means that you will not have to navigate difficult hurdles that would accompanying the creation of your own startup.
However, if the previous owner(s) made mistakes, you are responsible for identifying and amending them. Because you are coming into the business operations later in the game, you may not know exactly what led to the mistakes, and though your insight will be fresh and new, you may struggle to identify what the best course of action will be. Failing to fix major problems can lead to disaster.
Even if you do your research on the business’ financial history, there is no truly accurate way to gauge the worth of a business. Depending on the demand for the business’ product or service, you may find that your purchase is a flop; this is a risk you will have to take if you want to buy an existing business. You should also consider the potential reasons a business might be on the market; the current owners might anticipate a significant dip in profits or a decline in public interest, so you should be aware of the possible causes one might have for selling their business.
There is no right way to be an entrepreneur, and each experience is individual and unique. Identifying your goals, resources, and motivation will help you determine whether starting a business or buying one is the right move for you.