If you have ambitions to become an entrepreneur, you are certainly not alone. But starting your own business has many challenges, while buying a business is also a good alternative. But what are the pros and cons of starting your own business or buying a business?
Starting your own business
There are many start-ups every year in a wide variety of industries, but there are also many write-offs every year. Bankruptcies or simply failures, because entrepreneurship is underestimated. You depend not only on your own perseverance and talent, but also on the market, your customer base and many other facets.
If you like the challenge of building something yourself or have an innovative idea, then starting your own business is probably better than buying. Even if your budget is limited, starting a business is a better idea. You can even start alongside your regular job or part-time. We like to list the pros and cons of starting a business for you.
Advantages
- Ideal for reducing costs;
- Enjoy the freedom of entrepreneurship;
- Flexible working hours.
Disadvantages
- Great responsibility, because everything comes down on your shoulders;
- Starting a business is a time-consuming job, so prepare for long days and short nights;
- Financial risk, due to investments and variable income;
- Lots of stress;
- Also perform tasks you are not good at or don't feel like doing, such as administrative tasks.
Buying a business
We have now looked at the pros and cons of starting a business versus buying a business. As you can see, the list of disadvantages is quite long in comparison. How is this ratio when buying a (second) business?
Advantages
- The start-up phase is already completed, saving you a lot of time;
- You have instant cash flow from day one ;
- Name recognition is no longer an issue;
- There is an existing customer base, so you know there is a market for your product or service;
- If you need financing you realize this more easily, due to the fact that existing businesses are generally less at risk;
- Less work because the business is already running;
- You can put your time into increasing profits or expanding your market share;
- The luxury of an experienced team, without having to spend time training and hiring.
Disadvantages
- There are bound to be optimizations;
- Sometimes there are high structural expenses, so you have to work hard to increase profitability;
- You must have capital for the purchase price.
Starting a business versus buying a business
We've listed all the pros and cons for you, and the advantages to buying a business stand head and shoulders above the other options. Taking a leap of faith will simply save you a lot of time, money and stress.
If that doesn't convince you: depending on the economic climate, only 35 to 50 percent of start-up businesses survive the first five years, while the percentage for transferred businesses is between 90 and 96 percent. Business transfers also lead to more innovation, growth and employment than start-ups, the same study "More likely to succeed with business transfers" shows.
