Should You Buy a Business? How to Weigh the Pros and Cons

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This article will help aspiring entrepreneurs assess the benefits and drawbacks of buying a business and starting their own.

You’ve been working in the corporate world for years, and as you’ve advanced through promotions, you’ve learned more about the ins and outs of running a business. You’re interested in owning your own company, but you’re debating between launching your very own business or buying an existing one.

If you’re torn between two options for business ownership, you might benefit from creating a list of pros and cons for each option. goes over the perks and downsides of buying a business.


Pro: Avoiding Startup Basics


If you want to open your own business and build it from the ground up, you’ll be responsible for a long list of administrative obligations. This includes registering for your preferred business structure, seeking outside funding or applying for business loans, opening a company bank account, getting set up with payroll, finding an accountant, and more. When you buy a business, you’ll be able to avoid most of these tasks.


Con: Tweaking Existing Strategies


By buying a business, you can skip over some of the logistical tasks that come with launching a startup. However, you’ll still need to tweak and adjust some existing internal strategies. For example, the company may be relying on an outdated marketing strategy, which you’re now responsible for updating.

Incorporating social media marketing into a lackluster advertising strategy can help you reach new audiences. For instance, you may want to start a promotional YouTube channel, where you can host videos showcasing your products and services. This will direct more traffic to your website. A YouTube banner template can help. Picking one of these templates gives you an excuse to get creative! If you want to display a personalized banner on your channel page, you can use an online banner maker. You’ll be able to customize the banner with your logo, text, and favorite font.


Pro: Positive Cashflow


If you’re taking over a business that is already operating, this company will likely have a positive cash flow already. This is a huge bonus for entrepreneurs, as establishing a healthy cash flow is one of the most challenging aspects of running a brand new startup. While you’ll still likely want to boost the company’s cash flow after you assume leadership, you’ll be off to a head start compared to someone who is opening a brand new business.


Con: Difficulty With Valuation


It’s easy to assume that a business will be profitable from the outside – but the difficulty of receiving an accurate valuation is one of the downsides of buying an existing business. To really figure out how much a particular business is worth, you will want to hire an appraiser. However, you can come up with an informal estimate on your own by researching businesses of a similar size in your area. You can also look into the company’s pre-tax and post-tax earnings, as well as assess how much its assets are worth.


Pro: Ready-Made Supply Chain


As a new business owner, you need to put a lot of effort into establishing a reliable supply chain for your company. It can take quite a long time to find trustworthy suppliers who consistently deliver the materials you need on time. But when you buy a business, you can utilize the supply chain that the previous owner created. While you’re free to research new suppliers as well, this is definitely more convenient than building a supply chain from scratch.


Con: Outdated Processes


Yes, setting up supply chains and other business processes on your own is difficult – but at the same time, so is improving outdated processes. When you take over an existing business, there’s a good chance that some of its processes will need to be enhanced or overhauled altogether. You may also need to purchase new technology for better efficiency. Frevvo suggests identifying a process to improve, targeting bottlenecks, mapping out a revised new process, and then testing it out and adjusting it as necessary.


Pro: Plenty of Clientele


An existing business already has its own clientele. You won’t need to build up your customer base from nothing. Naturally, the current customers will expect a certain level of service, so you’ll need to work hard to meet their expectations.


Con: Lack of Experience


Yes, you have experience working for someone else, and maybe you’ve even run your own side hustle before. But when you’re buying a business, your lack of experience can hurt you. There isn’t as much room for learning as you go, because the wheels are already in motion, and you will have a staff and clientele depending on you from day one. You may not even realize which areas you’re inexperienced in until you start running the business.


Pro: Established Staff


Hiring a great team is one of the biggest challenges that business owners face. If you buy a business, you may have the option to retain the current staff. This can save you lots of time, and it means that your team will already have a deep understanding of company operations and processes.


Con: Finding Acceptance as a Leader

Stepping in as the new leader in an established business can be hard. You need to work to earn the trust of the staff. To get to know your new team better and establish yourself as a leader who cares, Quiet Light recommends speaking personally to the staff so that you can get a sense of who is committed throughout the transition. Keep your performance expectations clear, and ask them to document current processes as well as their personal goals so you can get on the same page.

Buying a business is a major undertaking. While it can be easier than starting a business in some ways, this process can also pose some unique challenges. Before you invest your money in an existing business, it’s important to go over all of the potential pros and cons of this big financial decision. With these guidelines in hand – including tweaking strategies, boosting cash flow, and having a social media presence with ads on platforms like YouTube – you’ll be able to make a smart choice for your entrepreneurial future.

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