To succeed in entrepreneurship, there are two paths we can choose from. Starting up and building our own businesses from scratch or purchasing an already existing business. Each of these two approaches has its own proponents. Each side of the business divide believes that their respective path is a sure way to the final entrepreneurial destination, which I call success. But even if we take sides, I would want us to approach this topic from a neutral standpoint and soberly consider each approach, as though we have never considered it before. Of course, each process has its own pros and cons, which I want to look at in this post.
Starting a business from scratch is both good and bad. Let’s start with the positives.
Immense potential for success: If we are just emerging from nowhere with a new business, people will be interested to know what we offer and how we provide it. The business is more likely to draw the public’s attention more than an existing one. Suppose the people find that the business offers better services and products than the existing ones. In that case, we can expect customers to flock in, and the success could come earlier than thought. After all, we all know that new things interest us more than what we see and use every day.
Nothing like fixing previous mistakes: When starting our own business, we are responsible for every step, and we will not have to get into resolving any issues left by somebody else because the company is brand new. From debts and lawsuits to branding problems, there will be nothing to fix at all.
Having looked at the advantages, let’s now look at the negative side of things. As they say, no good thing lacks a bad side.
It is involving: Starting our own businesses from scratch involves a lot of work. From renting or building the business premises to hiring the staff and everything else, we have to really get down to work to get our enterprises going.
Problem getting funding: While we may use our own savings to start a business, we might need some external funding to top up our capital. The challenge comes when we have to find someone or an institution that funds a startup. That is because any new business is shrouded in uncertainty, and very few people or institutions are willing to risk their funds on such entities.
Building a client base from scratch: This is not something that many of us want to hear. When starting a business, we should not deceive ourselves that customers will start flocking in, right from day one. It may take days or even weeks to get the first customer. That is because the business is still new in the market, and people are yet to know about it or gain confidence in it. Thus, we may need to spend some good money on marketing.
This approach comes with its own pros and cons as well.
It is easy to get funding: Now that the business is already up and running, its potential for success can easily be determined, and the lending institutions will have a sort of a money-back guarantee.
No massive marketing required: The business is already known to people, so we will not be building our client base from scratch. In fact, the existing client base is what makes most businesses so expensive to buy.
Less startup work: Yes, we don’t have to buy equipment, build or rent premises, or hire workers unless we just want to do some renovations and scale down/up the human resource.
We could be inheriting some problems: This could range from defaulted loans and a bad reputation to ongoing court cases and other issues.
Rebranding: We may need to do some rebranding to inject life into the business. The existing brand may have damaged its reputation beyond repair.