The age-old question modern entrepreneurs are asking themselves is, is it better to buy a business that is already stablished, or try to build one from the ground up? While there is no right or wrong answer in this regard, there are a number of factors that impede on either side which should always be considered case-by-case.
There is something intrinsically rewarding when building a company from the humble beginnings, but there comes a large element of risk with it, whereas when you buy a business – there’s an established foundation that you can continue on with and grow at a much faster rate.
We’re not going to air on the ‘buy a business’ or ‘build a brand’ side, we’re simply going to explore some of the more prominent pros, and considerate cons that associate themselves with either choice. So, whether you are a budding young upstart entrepreneur or a seasoned veteran in the field – this article is for you to consider.
Legacy Ownership
As most entrepreneurs will say, legacy plays a pivotal role in the long-term game, and in their decisions thereof. Those who buy a business will often be jumping in on an established territory and some may have that strange thought in the back of their minds that no matter how large the company gets, they weren’t there to craft it from the beginning.
This is where the pro for building one comes in, the ownership of legacy is not a trivial thing for some who consider what they are leaving behind once they’re gone. When building a brand from the ground up, there’s an element of self that is intrinsically transferred into the DNA of the company that cannot be washed away easily.
Time Sensitivity
Now, not everyone has the tie and resources to simply build a brand from the ground up. One of the expressed pros for those who buy a business is the reduced time that is taken in the slow process of starting up. This may be the exciting part for some, but for the modern entrepreneur who has their fingers in a fair number of pies, this can be counterintuitive for the bottom line.
After all, who has the time to spend on finding locations for stores (if relevant), hiring staff, building supply chains and relationships with distributors, all before making a sale? If you were to buy a business, you essentially start the race a little further down the track which can pay dividends a lot sooner than if you were to build something from the ground up.
Room To Diversify
As we mentioned already, those who buy a business essentially skip a lot of the time-consuming aspects of creating a brand and instead run on with all the elements in place. This also lends itself to those who wish to try their hand in a number of industries and don’t wish to spend too much of their time or money in taking a risk that may not work out.
While the Pro for building a brand is that you could potentially tap into an untapped market and make bank, there is a certain level of safety associated with those who buy a business that already has its ducks in line and have some level of assured payback engrained in the DNA.
So, there you have it, there are pros and cons for both sides of the buy a business/build a brand aisle. In the end, it comes down to the type of investor/owner you happen to be – while it may be exciting to create something of your very own, there are some who have a more expansion-minded focus and will opt to buy a business here and buy a business there to facilitate exponential growth.
