Should You Start Your Own Business Or Buy An Existing Business?

Being a business owner is an incredibly fulfilling career path to take. You can be your own boss, set your own hours, and have unlimited earning potential. But if you’re taking your first steps onto the entrepreneurial pathway, you must choose between starting your own business and buying an existing one.

At Eden Exchange, we’ve been in the business buying and selling industry for decades. We’ve seen people start their own businesses, buy into a franchise, and take over an existing business, all with brilliant success. The right choice for you will be entirely personal, but if you want more information on your options, we’ve got you covered.

Look below for more about the benefits of starting your own business and buying an existing one.

Benefits of Starting Your Own Business

Starting your own business comes with many benefits. It allows you to build something from scratch that is truly your own. Below, we’ve examined some of the top benefits of choosing this path and why it could be right for you.

Personal Vision

One of the most obvious benefits of starting your own business is that you get to choose what the enterprise will be. 

When starting a business, you get to develop your branding, product line, and services from scratch. You shape the brand’s journey and implement strategies to see how they work out.

Flexibility

You get to choose which industry your business will be in. You choose the business model and ensure it aligns with your goals and vision. While you may find an existing business for sale that aligns with your values and skills, it is much less likely than if you were to start your own.

Say you are very passionate about sustainability and want to build an entirely ethical business that runs on a circular model. Your best bet is to start it yourself, so you get it right!

Funding

While starting a business is not cheap, there are ways to save money early on. For example, if you’re selling homemade goods, you may opt to work out of your kitchen rather than renting space to reduce costs. However, if you acquire a business, you will need funding to purchase it from the seller.

When you buy a business, you buy everything from the tangible assets to the customer base. So, the price can be high. As a smaller business just starting, you can ease the initial financial burden by gradually investing capital, diverting profits back into the company, and growing it when financially possible.

Avoid Any Issues That Already Exist

With an existing business, you risk dealing with disputes, legal issues, and customer conflicts that have already occurred within the company. While it is good practice for business sellers to sort out any disputes before they sell, some may not. So, you could inherit more problems than you realise.

When you start your own business, these issues don’t exist. And, when they occur, you can deal with them how you see fit.

Personal Growth

Anyone who becomes a business owner is on a path to fantastic personal growth and development. You will experience challenges like never before and have to learn on the spot. You will also develop new skills and abilities, and build resilience. 

While you will develop personally if you acquire an existing business, you will learn much about yourself if you build a business from scratch.

Benefits of Buying an Existing Business

The benefits of buying an existing business differ slightly from those of starting your own. To begin with, most of the benefits centre on the business side of things. With an already-established customer base and due diligence completed, you will spend less time setting things up when you buy a business. 

But this doesn’t mean there’s no room for personal growth and development when you take this route. Take a look below to find out more about the advantages of choosing to buy an already existing business over starting your own.

Existing Customer Base

As we mentioned above, an existing business has a customer base. This means you don’t need to worry about gaining customers in the initial stages. The risk when starting your own business is that you won’t have anyone to buy your products or services. When you buy a business, this isn’t the case.

While we’re not saying you will never have to worry about customers, it takes the pressure off your shoulders when you already have a customer base available. It gives you time to find your footing in the world of business ownership before beginning to look at boosting customer concentration and expanding your clientele.

Established Brand

In the early stages of building a business, it is paramount that you establish a recognisable brand. Fortunately, with an existing business, this has already been done. So, if you don’t know where to start with branding, you will have a point to set off from.

Good branding is crucial to success. So, buying a business that has good marketing means that the pressure is off you again.

Cash Flow

While the initial investment in acquiring a business may be more expensive than starting your own, you have immediate cash flow available if you buy one. This is because you’re not going through the development phases and trying to build a loyal customer base. Instead, all of this is already available.

This allows you to divert funds into further product development, marketing and increasing customer concentration.

Suppliers, Distributors, and More

For business-savvy people, building relationships might be easy. For others, it can be a challenge. Buying an existing business is a good option if you find networking challenging.

When you buy a business that has already been operational, it will have contracts with suppliers and distributors to ensure everything gets done how and when it should be. While buying a business, you’ll be able to go over existing contracts and the business’s standard operating procedures to ensure everything is in place before you step in.

Reduced Risks

When you start a business, you take on a lot of risk. You don’t know how the market will turn. If things change dramatically, it could be the end of your business before it’s even started.

While buying a business is not risk-free, a business seller will lay out the risks for you as you negotiate a price. They will identify issues they have had, so you’re fully prepared going in. You can plan for economic downturns, seasonal changes, and supplier issues.

Growth

While starting a business can be great for personal growth, if you acquire an existing business, you can invest more time and energy into financial growth. This means you will see the financial rewards of business ownership more quickly and be able to reinvest money in areas you’re passionate about.

Which One Is Right For You?

Starting your own business is a good option if you are someone who has a clear vision of what you want your business to be. You may have a skill set that lends itself to a particular industry and want to start a business there.

If you have strong values and a mission in mind, you’re more likely to feel fulfilled shaping the business path from the start. However, you might consider buying a business instead, if your goals are earning potential and putting your skills to the test,

When you acquire an established business, you can start strongly. With the entire company already set up, your focus can be on growth.

Buying an established business is an excellent choice for those with an entrepreneurial mindset who don’t want to start their own business but want to test their business management skills.

Starting Your Own Business Vs. Buying an Existing Business

As with all business choices, choosing between starting your own business and acquiring a one is entirely personal. Consider your strengths and how they align with each route while also considering what you want to get from being a business owner.

If you’ve decided to buy a business, contact Eden Exchange now. We’re a one-stop shop for all things business buying and selling. With thousands of business listings already on our site, you’ll have more choices than you need.

Our platform has everything you need to buy a business, including guidance and advice from experts in their fields. Get in contact with the team to find out how we could help you in your first steps to business ownership.