If you want to run your own business then there are two possible routes to consider. You could start a brand new business or you could invest in a business that is already up and running. The best option for you will depend on your circumstances and the current state of the market in your sector.
Starting a New Business
Starting a new business is a big challenge. You need to come up with an idea, build a brand, and find your place in a market that may already be full of competitors. Although creating a new business can be one of the most rewarding things you’ll ever do, it’s important to be aware of the challenges you’ll face if you choose this option.
- You’ll have complete control over everything, from the colours used in your branding to the processes you use in the workplace. You are creating something that is truly your own.
- No one will know you. You will need to build awareness of your brand and create relationships with customers, suppliers, and others. It can take time to do this.
- New businesses require a lot of investment. You might not make a profit at first, which could affect your personal finances as well as the business.
- If you have an original idea or you’ve identified a new market with no competitors then starting your own business may be the only option.
Buying an Existing Business
Buying an existing business can give you the same independence as starting a business, but it will also come with some significant benefits. If you choose the right business, it will come with an existing customer base, a strong brand, and a steady or growing income.
- You won’t have to do everything from scratch. The business will already be up and running, so you can build on existing branding and systems rather than having to set everything up.
- The business will have existing customers, so you should start getting an income immediately. If the business is in a good position when you buy, you’ll generate a profit.
- You can continue relationships with suppliers, employees, and other key people. You won’t have to find people to work with while you’re running the business.
- Forecasts are more predictable when the business has been running for a while. You’ll have a better idea of your future income and cash flow, which can make planning and applying for financing a lot easier.
- You will have to build on what the previous owner did. Although you can rebrand and change the business, you will need to consider the existing business to avoid losing customers or damaging the brand you’ve bought.
Which Option is Right for You?
The best way to become a business owner will depend on your hopes for the business, whether there are any suitable businesses for sale, and which option appeals more to you. If you’re looking for a challenge, then creating a new business could be right for you. However, if you want to run a business without struggling through the difficult startup years, it may be better to buy an existing business.
As well as considering your own aims and preferences, it’s a good idea to look at the current market before deciding what to do. If the economy is doing well, then startups can have a better chance of succeeding, but if your sector has been struggling, then buying an existing brand can increase your chances of success. The COVID-19 pandemic has been a huge challenge for many sectors and the continuing uncertainty could be particularly damaging for new businesses. Investing in an existing business that has a stable income could be a better option at this time.
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