Deciding to venture down the online entrepreneurial path can be exhilarating and frightening at once. We’re bombarded by alluring messages about what it means to become an entrepreneur in this digital age—freedom, creativity, additional income, and ditching the corporate world to name a few. However, the reality of being your boss is that there’s a lot of uncertainty that comes with the territory.
After choosing to pursue your entrepreneurial journey, specifically focused on e-commerce, you’ll be faced with the crucial decision of buying an existing business, or starting your own. Without a trusted network of support and completing the requisite due diligence, you could face challenges early on that could hinder your success.
Let’s face it—being an entrepreneur takes guts, grit, and relentless determination. It also takes strategic decision-making and knowing how to get started. Whether you’re starting your own or purchasing a business, you’ll need to weigh the pros and cons of each path and determine which one is better suited for you. Keep reading to find answers that could help you answer the key question, should I buy a business or start one?
When most people think about the opportunity of business ownership, what immediately comes to their mind is building from the ground up—finding or developing a product, nurturing the customer base, hiring employees, marketing, selling, and then delivering the product.
However, when owning a business, pros, and cons should be considered. There are clear benefits to running your show, whether you buy a business or start your own, including the range of skills you’ll learn and the creative freedom of building something of your own. Since you’ll be responsible for everything from creating a website, copywriting, sales, and advertising, you’ll need to become knowledgeable about so many facets of a business. On the flip side, there are disadvantages to starting a new business...
With all the skills and information you’ll need to absorb—you’ll be working pretty hard without income coming in immediately. Another huge downside is with the lack of customer awareness, it might take time to sell your product or service. Ultimately, this means you won’t be bringing in money right away.
And the reality is just because you start a business doesn’t mean it’ll be successful. According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business.
Similarly, if you buy an existing business, there are also pros and cons. One of the biggest advantages, if you choose to purchase a business that’s already profitable, is that you’ll be generating income from day one. Another benefit is that you’ll inherit an existing customer base and ideally you already have a team that knows how to operate your new business.
Many of the kinks that need to be worked out, from operations to shipping to staffing, fell on the previous owner. You can skip the grunt work of getting the business off the ground and avoid reinventing the wheel. Some of the downsides when buying an established business include finding a safe and profitable business to buy. This step requires a deep level of self-awareness in terms of clarity about your goals and your ability to purchase a business that builds on your strengths and compliments the desired lifestyle you’re seeking.
You also might run into challenges in terms of the previous owner’s full transparency about the business. Additionally, purchasing an existing business could prove to be a frustrating endeavor if you don’t have the initial capital to invest, and if you lack the skill set—or understanding of the type of people you need on your team—to grow the business.
In both scenarios, a clear understanding of your strengths, challenges, and abilities will be required to make an informed decision.
If you’re leaning towards the purchase of a business, Boopos can support you on that journey. With our pre-vetted list of profitable businesses, we have already done a substantial amount of due diligence for you. Boopos can assist you with the initial capital you need to purchase your first business, but we don’t stop there.
We also act as trusted advisors guiding you through the entire business acquisition process. Take a look at our marketplace of successful businesses to purchase, and if you’re ready to take the leap, make an appointment with a Boopos advisor here.