Is it Better to Buy or Start a Business in this Economy

Well, this is a bit of a tough question to answer but it has come up to me numerous times lately. Some of the answer has to do with you personally and some has to do with the economies of buying versus starting.

First off, if you have little experience in sales and marketing, buying a business is probably your best bet. In this case you can have a business that already has established sales channels and people taking care of it. Or at least you can be taught about it in a situation that has already been proven to work.

On another personal type issue, having the ability to put in a down payment and have some side working capital is the question. Will it cost more to buy than to start? That often depends on the type of business. Services are usually cheaper to start from scratch and retail based is usually harder. But it's not etched in stone to be that way.

So here's my take if you have the notion to get into business for yourself this year and some money to work with: Buy a business that's already making a profit and use the seller as the note holder after your down payment.

It's a buyer's market in terms of sale price and getting the seller to hold a note. It's never a good idea to involve a bank and right now it will be a very rare instance that they will get involved.

Here's the other reason to buy versus start right now:
The advantage of momentum.

It’s all about a running start. This is the plus you get when your decision is to buy rather than make a business. Even if you buy a business that is barely making a profit, there is momentum. That momentum gives you the time to determine what you need to change in order to make the business work better. If it is already doing well, it allows you time to figure out how to keep it that way.

As long as the profits cover the payments on the note and put enough money in your pocket, then it's a good idea.

When you start from scratch, you will most likely spend less money upfront but possibly more money over time. You will also be starting out with no physical structure (office, store, etc.) and probably very little business operations knowledge. But more importantly you will have NO CUSTOMERS! It could be weeks, but most likely months, before you have any revenue at all. But even so, the bills still must be paid.

A purchased business has both structure and customers. This allows you a much better chance to learn some business operations skills and truly see where you can improve the business and run it your way. That, my friend, is MOMENTUM.


To Your Business Buying Success-

The Business Buying Guru