Once you have decided to become your own boss the next big decision to make is whether to buy an existing business or start up a new business.
There are pros and cons to both buying and starting a business so it is important to weight up the options carefully and assess the rewards to risks.
The risks of a new business failing are high. According to Michael Gerber, author of The E-Myth Revisited, 40 % of new businesses fail in the first year, and 80% fail within five years. However if your business succeeds the rewards can be significant.
On the other hand, buying an established business reduces the risk of failure and provides an opportunity to create substantial profit.
On balance many consider buying a business is a safer option than starting a new business for the following reasons:-
- Proven concept – With an established business you know it works.
- Finance- It is easier to obtain funding for an established business as it already has a proven track record.
- Brand- The business is already established and you will benefit from the previous owners marketing and networking.
- Customers- Already have an established customer base built up over many years.
- Stockists- Trading links with wholesalers are already in place.
- Staff- Trained staff are already in place. Their expertise and knowledge of the business can be very valuable.
- Business development- Because the business is already established you can focus on improving and developing the business immediately.
There will always be risks involved in becoming your own boss. However buying a business, is taking a calculated risk, which eliminates a lot of the pitfalls and reduces the potential for failure that come with a start-up business.
Whether it is starting up a business or buying an established business, at Peter Robinson & Co. we have 30 years of experience in commercial property law. We will be able to provide all the necessary expertise to support you when buying a business.
Get in touch with Peter Robinson & Co. now on 0161 678 7996