Buy a startup or buy an existing business?

[amy522]

Is it better to start a new business or buy an existing business that someone is selling? I am looking at owning a business and am not sure which way would be better. I know that with buying a new business there are a lot of startup costs and gaining customers can be difficult and with buying an existing business, there is usually already a steady client base and all the initial costs are taken care of. I am interested in buying a bakery and have found a few on this website: buyabusiness. com I am leaning towards buying a business that someone is selling instead of building my own from the ground up but am looking for comments from others on what they think would be the best option.

[ionsysproject1]

According to me you must make a deeper research in the market, such that which business booming now a days. Then you can start your own business, that will be better than buying a business.

[Paragon]

There are pros and cons to buying an existing business.
It should really be looked at on an individual case level as the situation/location/reasons will depend on whether you should buy or start from scratch.

[Punched]

Another reason is why are they selling??? You need to research the line of business a bit more and find the real reason.

Don't be embarassed to ask to see the last 3 years set of accounts, if a business is selling in good faith then they will prove to you what they are saying about turnover and profit is true, if they don't show the books to you, stay clear, no matter how cheap it seems.

Buying a business that someone is selling is great, because its all there for you as part of the sale, should save you a few £'s, But please find the real reason they are selling, Thats the main area you need to deal with.

Perhaps i'll pop in a buy a cake from you soon!!

Good Luck Amy

Gerry

[Nature's Parlour]

It is important that you do a market research first. Find out what niche is working nowadays. I think it is important that you choose a niche with a competition. Sometimes its risky to start a biz without knowing if it works in the market.

[Joe Micheal]

There are some pros and between both option. Choice between start-up and buying an existing business depends on number of factors.

- Do you have the money to buy a business or can you borrow it?
- Can you live without income for a time of period?
- Have you got a great idea?
- Do you have business skills like sales and marketing, merchandising etc. oe do you need to hire professional staff for this?
- How much risk you can stomach?

Keep in mind, start-up are more risky, they need a lot of time and money to inject. If you have patience, so go with new business else other option is open.

[coe114c]

I've been trying to upload a file for you but it won't work!

It is an e-book by Neil Asher 'How to buy a great business with no money down.' Basically you get the seller to finance it - if it is a great business should be no problem with that!

[Paul Norman]

The two things are enormously different. If you are buying a business you will need to understand as fully as possible the business with its strengths and weaknesses. You will need to gain access to their records to carry out a full process of due diligence, and you will pay for the ability of the business to generate profit over the next few years.

However, you will have immediate turnover, and immediate profit, if the business is worth buying!

Buying a business is a specialised matter, and you should be careful, and, if not an experienced acquirer of businesses, take detailed professional advice.

Personally, I do both! Of my businesses, one was a start up, two were acquisitions.

[4little1s]

When we started up our business we looked and buying a company initially. However having now set up our business from scratch I would say start up yourself rather than buying a business. Some key points to note:

Due Diligence - From seeing accounts for last 3 years, to asking why you selling ?
Research - What is the potential for the future, competition etc
Finance - How you going to get the money ? Whats the ROI period ? Remember you need working capital not just the money to buy the business.
Staff - You are inheriting them....some maybe good / bad / nightmare
Suppliers - Good relationship, credit terms etc etc


Starting yourself means you have more control over some of these decisions above that someone else has already made. Sure its harder work starting yourself....but hey, anything worthwhile these days is HARD WORK.

Good luck

[WaterCoolersDirect]

Is it better to start a new business or buy an existing business that someone is selling? I am looking at owning a business and am not sure which way would be better. I know that with buying a new business there are a lot of startup costs and gaining customers can be difficult and with buying an existing business, there is usually already a steady client base and all the initial costs are taken care of. I am interested in buying a bakery and have found a few on this website: buyabusiness. com I am leaning towards buying a business that someone is selling instead of building my own from the ground up but am looking for comments from others on what they think would be the best option.

If you can find a business that you could be passionate about then as a trading entity this would be a way to fast track your entry into being the master of your own destiny. You are correct in your assessments of starting from scratch and the first years are generally the most challenging. That said, you will have to be very careful about studying the detail involved and trading histories of the businesses you choose to look at. Seek professional help so that you can carry out a detailed analysis BEFORE committing.

All the very best and good luck

Fred Cairns Palmer