Is Buying A Business Easier Than Starting From Scratch?

buying a business versus starting startup from scratch

Buying a ready made business is considered by some to be the easier option than starting a business from scratch. In some cases this is true. However, there are still a number of things to consider before you go out and spend your money on any old business. Let’s take a look at the things you’ll need to consider in order to make it work.

To Begin With... 

Buying a ready made business may very well be easier, but it’s still going to be hard work from the beginning. You need to spend time searching for a business that’s going to suit you, your lifestyle, and your goals. The costs involved with buying a business can be huge, so make sure you don’t underestimate them. Considering the pros and cons There are many pros and cons you’ll need to consider before you make a decision like this. Here are just a few: 


• Less groundwork to take care of 
• A market already exists for the purchased distressed business
• Pre-existing network of contacts 
• A business plan already in place 


• Invest large amounts upfront 
• Working capital needed to help with cashflow problems 
• Consider why the current owner is selling 
• Current staff may feel apprehensive about the change 

Deciding On The Business You’ll Buy 

Spending a good amount of time finding the right business for you is important. You need a business that will fit your skills, lifestyle, and aspirations in order for you to be as happy as possible with your decision. Make sure you also think about what you can bring to a business and what you’d like to get out of it. Your motivations and what you’d like to achieve should also be thought through carefully. Consider things like your abilities, the money you have to invest, and expectations in terms of earning. Make sure you accurately assess your strengths and your commitment levels. 

Valuing A Business You’re Thinking Of Buying 

Once you’ve found a business you’re thinking of buying, it isn’t enough to be excited about it. You need to make sure you value it properly. Look into the history of the business, and things like performance; sales, turnover, and profit. Look at future projections in the business plan, and changes that could have an impact on the business. Buying financial practices usually comes with many of the considerations listed, but you will usually need to ensure you take the individual nature of a business and industry into account too. 

The following things may also be considered as assets to a business, or things that can increase value: 

• Relationship with suppliers 
• Reputation of the company 
• Stock 
• Assets 
• Employees 
• Premises 
• Competition 
• Various additional factors

Ensure you also carefully consider the economic climate - this may be a reason the business is up for sale. If you don’t do as much research as possible, you might just end up with a business that nobody really wants anything to do with! 

Business Buyer

Are you thinking of buying a business rather than starting a startup from scratch? Tweet @MikeSchiemer with your thoughts and experiences in the area of buying a business vs starting a new company from scratch.

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I hope you enjoyed this article about buying an existing business versus starting a new company from scratch.

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