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Should You Buy a Business or Start a Business

The big dilemma most entrepreneurs face when deciding to go into a business is the decision to buy an existing business or start a new venture. There are pros and cons to both which we will discuss in this article.

If you have limited financial resources starting a home-based service business may be your best choice. The upside to this type of start-up is low overhead, and tax deductions for using a portion of your home and vehicle. Beware, home-based businesses are scrutinized by the IRS.

When starting a new business you will need a comprehensive business plan to guide this venture in the early stages.
A new business requires a real estate location, developing a supplier network and intense marketing to build your customer base. Since your new business has no performance record, it stands to reason that financing will be difficult. One last caveat, 50% of new businesses fail within five years.

If you’re serious about going into business and you have the financial resources your best strategy is buying an existing business. The advantages to buying an existing business are financial records that you can check before making the purchase. Established supplier alliances, a customer base, a physical location, and most important a company identity. Buying an established business is your best bet for success.