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Would You Start a Business or Buy a Business?

Discussion in 'Starting Your Business' started by Nunzio Presta, Feb 3, 2017.

Would You Start a Business or Buy a Business?

  1. Start a Business

    12 vote(s)
    80.0%
  2. Buy an Existing Business

    2 vote(s)
    13.3%
  3. Start a Franchise

    0 vote(s)
    0.0%
  4. Buy an Existing Franchise

    1 vote(s)
    6.7%

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  1. Nunzio Presta

    Nunzio Presta Member

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    Thoughts?
     
  2. Adam Toren

    Adam Toren Administrator Moderator Member

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    Nunzio, we have done both (starting a business from scratch and also buying struggling companies and overhauling them) several times.

    Great question!

    We've learned that the principles in starting a new business and taking over an existing business are very similar.

    It seems to always boil down to these three things.

    1) work ethic - understanding that whether you start your own business or buy an existing business you are embarking on an entrepreneurial emotional roller coaster journey. There are going to be days in both scenarios that you feel like throwing in the towel and giving up. The perseverance and problem-solving mindset that you incorporate in your day-to-day work ethic will help you get through the tough days.

    2) understanding and connecting with who your customer is - this is vital to the success of any business anywhere in the world. You need to be able to understand who your customer is and once you understand that you will quickly learn what they want. You can do this by ensuring you are a great listener and surveying your customers with various questionnaires or what is callled a survey funnel. This also is the key to quality customer service too. Get to know your customers to really learn what they want and give them more of that! That's where the strategic marketing comes into play too.

    3) Organization (proper legal set up, accounting/bookkeeping set up properly from the start). It's important to always ensure that you are iliminating any legal or accounting headaches from the start. Do all you can do to ensure you have hired the right professionals to assist you.
     
  3. William Clements

    William Clements Moderator Member

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    My answer is not actually up there. It really depense on the business/business idea. For example, for my Affiliate Network and incentive Get Paid To (GPT) sites are started by me. However, if I am looking for something like an app/other kind of website and I can find a existing business for sale (even if no traffic) for it such as what I have done for an Buying/Selling video games on my website/mobile app.

    However, if I were to be looking for a business with a large amount of traffic/sales, it would cost significantly more to invest upfront but worth the investment if it is something I am interested in and is already a money making, can make my money back in no time. However, have to be careful with those kinds of businesses at times they are not really making anything and your investment was not worth it.

    I never did invest in a big business that already exists and making money before due to issues with legit and truthfulness, among things. Does not mean I never will/would though.
     
    Nunzio Presta likes this.
  4. Nunzio Presta

    Nunzio Presta Member

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    Great reply!

    Would love to turn this into a blog post if you are okay with that - how can I reference you?
     
  5. Caitlyn Member

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    Excellent question! I was involved with a merger of 3 businesses, all 3 owners wanted to work as partners but not all were equally involved. Another party was sharing clients operating within the premises but given no say in the business plan. Tensions were high and I wouldn't recommend getting involved again.

    In another situation my relative was interested in buying an existing Pilates studio. Upon review, the business valuation it was much lower then the asking price. An offer was made to purchase existing client list and equipment. A new space was rented and refurbished to start fresh. That was 3 years ago and the company is very successful.

    From what I have seen I would choose to start fresh with the assistance of a locally owned formation company such as Company Bureau: Irish Company Formations with Company Bureau. Experience, Trust & Service

    Thank you for raising discussion this topic
     
    Nunzio Presta and djbaxter like this.
  6. VirtualGlobalPhone

    VirtualGlobalPhone Moderator MVP Member

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    Anyone venturing first into the world of business needs to start a fresh business.

    Its simply because, the story board is completely empty and as a entrepreneur you have the "choice" of choosing where to start , which color of the pen to use to write the story, whom to make the actor whom to make the paying audience and so on.

    The journey will be filled with full of emotions .. and ultimately success is the self acceptance what you left with or leaving to the world.
     
    Nunzio Presta likes this.
  7. Nunzio Presta

    Nunzio Presta Member

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    Hybrid approach - interesting...thanks for sharing.

    NP
     
  8. YourRetailCoach

    YourRetailCoach Member

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    Buying an existing business is not that risky than starting a business. It just includes more upfront cost. In both the ways it is important to have a business plan with you. Lastly, it depends on the business idea.
     
  9. Pauline Greening

    Pauline Greening Member

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    I was torn between starting my own or opening a franchise. I guess it will depend on the kind of business you'll start. I'd love to have my own fast food chain but I'm scared for it to flop due to the competition, so I'd rather open a franchise of a successful brand business wise.
     
  10. Julia Sta Romana

    Julia Sta Romana Member

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    If I could do it all over again, I'd start with buying an existing franchise first. What i like about successful franchise businesses is they have structures based around business models that already work. If you're willing to do the work, you can learn a lot from franchise business while running a business. Once I'm able to get that business off the ground, I would then start my own business based on what I learned from that.
     
    Pauline Greening and djbaxter like this.
  11. Small to Feds

    Small to Feds MVP Member

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    Buying a business or a franchise has its challenges.

    Buying a business:

    Here is some excellent advice from “Creative Business Solutions”

    “VALUING THE BUSINESS YOU WANT TO BUY”

    “Take the sales price with a grain of salt, most sellers ask for too much, and far too many buyers don't bargain aggressively enough. Lots of little businesses are worth no more than the fair current value of inventory and equipment. Goodwill, over and above the value of the continuing hard work of the owner, is commonly a myth.”

    Read more:

    Business Valuation

    Buying a Franchise: challenges involve the Franchise Disclosure Document, the Franchise Agreement, laws in your state and federally regarding franchises, a marketing plan and a personal plan for the load involved in becoming a franchisee.

    The contracts involved are particularly crucial. A key niche is the avoidance of many of the negative aspects that franchise buyers find hard to swallow involving control aspects, dictating supplier sources, heavy handed specifics in the contracts regarding performance and franchise fees and similar matters.
     
    djbaxter likes this.
  12. jcanne168

    jcanne168 Member

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    “Risk comes from not knowing what you’re doing.”
    ~Warren Buffett
    Put up a Business that you know..
     
  13. It's a nice question. In my case, I would prefer to start my own business.
     
    djbaxter likes this.
  14. zyra kate Member

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    It is an interesting question!
    The main difference between starting a business or a franchise, is that a business is something you have to start from scratch, like creating an awareness of the product but a franchise maybe an established brand and have a reputation to maintain.
    Both of them have their pros & cons, both requires a different level of thinking and creativity. I feel The requirement depends on nature of the business.
     
    djbaxter likes this.
  15. I shall say that I'd rather start my own business that I have knowledge about it and foremost really interested with it. However, some like just like buying an existing business but I believe there are also disadvantages in doing so, since you should also be aware of the records and reputation of the old business and it should have some good practices.
     
    zyra kate likes this.

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