The entrepreneurial journey isn’t easy, and it’s not the same for everyone. 

Learn how to differentiate between the roles and responsibilities of acquiring a business and starting a startup.

Starting a business involves creating a new company from scratch, developing a business plan, raising capital, and building the infrastructure and operations necessary to bring the business to market. 

This process can be time-consuming and risky, as there is no guarantee that the business will be successful.

Acquiring an already existing business, on the other hand, involves purchasing an existing company that already has an established customer base, revenue stream, and infrastructure in place.

This can be less risky than starting a business from scratch, as the acquired company’s financials and operations are already known. 

However, M&A can be expensive, and the due diligence process can be complex. 

From identifying the right business opportunity to calculating the potential risks, there are several key differences between buying an existing business and starting a new one. 

Starting a new business may be your only option if you have a truly groundbreaking business idea that you are passionate about. If the business you wish to own does not currently exist, you may have to build it yourself. 

Additionally, integrating the acquired company into the acquiring company’s operations can also be challenging.

With the right information, you can make an informed decision on which path to take.

Take control of your entrepreneurial journey and make your dreams come true. 

Get all the facts and make sure you know what it takes to own a business or start one from scratch.

Here is a list of the benefits and drawbacks of buying and starting a business.

Pros and Cons In Start-Up

• Ability to create innovation and disruption in the marketplace. 
• Flexibility and autonomy in decision-making
• Potential for personal and professional growth
• Ability to pursue a passion or idea
• Potential for high profits

• Very Hard Work
• Long Hours
• Many Fail in the First Year
• 50% Fail in the First Three Years
• 25% Survive for 10 Years
• Invent A New Product or Service 
• Huge Competition, Subject to Your Idea being Robbed
• Majority of Risk In Early Stages

Pros and Cons Acquiring a Business

• Existing customers: Customers will probably continue to purchase the company’s products and services.
• Well-established supply chain:  Suppliers, stock and supply chain are established, and long-term contracts are in place.
• Market share: Acquiring a business can help a company to increase its market share and become a stronger competitor in its industry.
• Better financing options: There are no immediate financial issues to overcome. Records can be used to show lenders or investors how the business is performing financially.
• Already established brand: There is no need to establish and secure the brand assets.
• Diversification: Acquiring a business can help a company diversify its product or service offerings, which can reduce the impact of market fluctuations on its financial performance.

• High initial costs: Acquiring a business can be expensive, as it may require a large upfront payment for the purchase price and any necessary renovations or upgrades.
• Unforeseen liabilities: The acquired business may have undisclosed liabilities that can become a financial burden for the new owner.
• Integration challenges: Merging the acquired business with the existing operations can be difficult, and may require significant time and resources to ensure a smooth transition.
• Loss of key employees: The acquired business may lose key employees during the acquisition process, which can negatively impact operations and productivity.
• Reduced flexibility: The acquiring company may have less flexibility in decision making and operations after the acquisition as it may be bound by pre-existing contracts and agreements of the acquired business.
• Changing Market trends: The market and client tastes may be shifting elsewhere, necessitating the necessity for new products or services.
• Older Equipment: Maintaining or upgrading equipment necessitates additional financial commitment.

Both options have their own advantages and disadvantages, and the choice between them will depend on the specific goals and circumstances of the entrepreneur or acquiring company. 

It would be best to seek professional advice before making a decision.

Acquisition Assist service can provide valuable support for you to acquire your perfect business through strategic acquisitions.

Want to learn more about M&A? Click the link belo!