#BusinessDiscussion #BuyVsStart #EntrepreneurshipDebate
Hey everyone! 👋 Let’s kick off an interesting discussion today – is buying an established business better than starting one from scratch? 🤔 I’m curious to hear your thoughts on this topic!
Here are a few points to consider:
– Pros of buying an established business:
– Immediate cash flow and existing customer base
– Established systems and processes in place
– Potential for faster ROI
– Pros of starting a business from scratch:
– More creative freedom and ability to build from the ground up
– Lower initial investment and potential for higher long-term growth
– Opportunity to shape the company culture from day one
So, what do you think? Have you had experience with either buying or starting a business? Looking forward to reading your comments. Let’s have a great discussion and share valuable insights to help each other out! 🚀📈 #BusinessTips #EntrepreneurialMindset
Not in my personal experience. Usually, people don’t sell easy businesses. The only exception is when they are too old and retiring. You are often buying a job.
If you don’t know why it’s better to buy, it’s better for you to start one.
Because you are still on the learning curve.
You buy cash flow, optimization arbitrage, revenue and/ or consolidation. If you don’t have a clear path in any or all of the above mentioned you need to run a company and learn why this is important knowledge to have.
My marketing professors advice was, if you buy an existing business, don’t change anything. Don’t hang a “under new management” sign because you’re buying an existing successful business. If it’s failing and you’re buying the equipment then change the name. Speaking from experience, I’ve started three successful businesses. I bought one and made a bunch of changes thinking it would improve business but it didn’t.
Both options have pros and cons. I’ve explored web development with Django and data science, and it’s the same idea. Buying an established business can provide stability, but starting from scratch allows for full control and customization. What’s your priority?
nope!
It’s definitely better. You can see all of its financials and how things run before buying it. You can come up with ideas to grow it without spending a penny. When you start a business there is a lot of luck involved. Many fail, however, when buying you know it’s working already. It always makes sense to buy one assuming it’s actually profitable and you have skills to continue to make it profitable. Having a track record of how a business has been doing over the years is invaluable in my opinion
Often
I sold 2 great businesses and the buyers wanted to be executives 1 if the two partners took time to learn the business they each would have incomes far more than they ever dreamt
Instead when they borrowed money to buy the business they used some of the money for down payments on a BMW and a Maserati they hired the existing staff and reduced the pay when the cash flow ebbed they were not business owners. They ruined the business in 6 months
The other business I sold was netting 28%
After the debt expense from the new owners it was reduced to 15% which was still a nice number
They sued me because they didn’t understand how to read financial statements.
So if you understand work and numbers it’s ok to buy a business that has upside opportunity
But to buy a business and hope it will provide without effort is crazy
And spending money before you have it is another problem
Good luck
Yes. More startups fail then already proven businesses. Search “ETA”.
Seems like it would depend on what type of business you are purchasing and the purpose the seller is selling. I think there are a lot of ‘build a website that sells barbecues’ businesses this show some okay numbers but it’s not long term. People build these websites every month explicitly to get them ok a certain size to sell.
Seems better to find an established business that someone has been running in the real world for years and wants to retire. Someone who hasn’t been growing the business but there are opportunities to do so. You could buy the business with a 1 or 2 year commitment to at the original owner stays on as a manager and trainer.
The financial aspect, imo, is the what, but you can’t get to that point without the how. And that’s the biggest friction point that buying vs. starting addresses. You buy a business because, hopefully, they have some portion of the “how” figured out. Take building a power line for example. Anyone can go online and see that you need a bucket truck, a digger Derrick, wire pulling equipment, etc. but you’re not gonna know all those little details that make a company profitable – everyone needs a pickup truck, how many hoists do you need, what type, who’s testing your rubber goods? How do the union agreements fit in? How do you build competitive labor and equipment rates? It would take me years to build that from scratch (and I have seen first hand people successfully do it). I’ve also seen top 100 nationwide contractors purchase a state level business and, with their nationwide infrastructure, turn it into a nationwide division in a decade or less. Even these massive companies appreciate the value of having the “how” figured out. Super interesting stuff
Depends what type of business you’re purchasing. Goes without saying, don’t buy a business that’s not making money
Yes, No, Maybe.
If you have the capital to purchase an existing business I would almost always recommend doing so. Starting a business from scratch is much harder than many people believe, especially the very beginning stages.
Do your due diligence first, understand the industry landscape and market trends, and innovate the current business with your new ideas
Both options have their pros and cons. Buying an established business can provide immediate cash flow and existing customer base, but may come with hidden issues. Starting a business allows for full control and creativity, but involves more risk and effort. The better choice depends on your personal goals, skills, and risk tolerance.
my question is why would anybody sell a good business.