This is one of the first decisions you have to make when you're thinking of starting a small business - and it's a big one.
At first thought, buying a business is very attractive. Someone else has done the work of creating and establishing the business. In the best case scenario, it's a turnkey operation and you're able to just walk in and take over. Many franchises fall into this category.
However, the main advantage of buying a business is also its main disadvantage in my opinion. Someone else created it. The way it's been operated may not fit well with the way you want to do things. Everything from relationships with suppliers through credit policies may need revamping and be resistant to change.
If you choose to buy a franchise when you’re starting a small business, the problem of grafting what you want to do onto an existing business can be exacerbated by control issues. Typically, a franchisee's decision making power is limited; the franchisor retains control of the business operations. Your job, as a franchisor, is to do as you're told and follow the franchisor's rules.
Whether or not this is a bad thing depends on what kind of person you are. Personally, I don't like being told what to do or have decisions made for me. But if you don't mind, buying a franchise can be an excellent choice for starting a small business. Many of them have excellent records as money making ventures.
If buying a franchise interests you, see The Advantages and Disadvantages of Buying a Franchise.
Whether you're thinking of buying a business or buying a franchise, it's important to do your due diligence and be sure you understand exactly what you're buying. Do the fixtures and equipment come with the premises? How long does the lease run? Is that goodwill really worth anything?
For more on the issues you need to look into before you make an offer to buy, see 8 Steps to Buying a Business.
As for starting a small business from scratch, the biggest advantage is that you are your own boss. Being the one making the decisions, you are free to shape your business to suit your own goals and dreams (and free to make your own mistakes, although that's not necessarily a bad thing either).
Some of the most popular resources on this website for helping you start a small business of your own:
- How to Start a Home-Based Business
- 5 Resources You Need to Succeed
- The Steps to Starting a Business in Canada
