Starting a New Business or Buying an Existing Business

Posted by Alex Harris on December 19th, 2016

When you want to become an entrepreneur you usually have two options. You either get a business for sale (עסקיםלמכירה) or you create your own. As you can imagine, both options come with their ups and downs. All you have to do is to make the right pick based on your needs, budget and requirements.

Risk factors

This is where it can be a good idea to get a business for sale. When you purchase a business that’s on sale, you get to work with an established company and its assets. You never have to worry about creating a business and the risks are obviously lower! On the other hand, creating a new business is risky. Investors expect you to succeed; you will have to cope with a lot of pressure, and there are lots of unknowns. You don’t know if there will be enough demand to sustain your business, nor if you can generate enough profit, in the beginning, to keep your business afloat. If you want fewer risks, getting a business for sale is a much better option when compared to creating a new one!

Employees

New companies aren’t exactly appealing to employees. Most employees want to work in a company that’s already established, so you will get more chances to acquire quality employees if you get a business for sale.

Rewards

If you purchase a business, you will get a good income even after the transaction closes, as the company is already generating profit. A new business won’t be able to makeprofit until you put a lot of work into it. Results can be great either way in the end and that’s imperative for sure!

Management

Purchasing a business will usually come with an already established management team. On the other hand, starting a new company will allow you to add in your team. Use it correctly, and it can be a blessing, but it can also be a risk!

Legal problems

The great thing when you get a business for sale is that you don’t have to worry about any legal hassle. The company is already created and there are no legal issues. On the other hand, a new business will require your full attention as you have to complete a lot of paperwork and spend a lot of time in financial or legal institutions to pull things through.

Reputation

Purchasing a company that’s already established means that you will inherit their status. This can be either a good or bad thing, depending on the situation. On the other hand, when you create a business on your own you are free to build up your reputation. This can be challenging, but it can also be quite rewarding as well. You get to choose your path here, and the outcome can be surprising.

As you can see, both options come with their ups and downs. It’s up to you to consider which option is better, study all pros and cons, pick the right budget, and you will not have a problem making the right choice. Keep in mind that sometimes it will be hard to get the funds to purchase a new business, so you will end up creating a new business instead!