Are you planning to become an entrepreneur in South Africa? Do you contemplate whether it is better to start or buy a business? If so, consider the advantages and disadvantages of both options before you make a final decision.
Start Your Own Business
It is risky at best to start a business from scratch. You need considerable start-up capital, even for a small business. If it is a completely new concept, you have the advantage of offering something original. However, you also have no data to go on to determine whether such a business can work. In addition, you need to find the perfect location and it can be difficult to obtain finance for start-ups. It will take considerable time, money, and effort to establish the brand, and keeping your doors open during the first three years can be exceptionally challenging.
The above said, if you are up for the challenge and the risk, it also has its rewards. One is that your concept is realised. This means that you get to start and manage the business the way you envisioned. You will build relationships with customers and will have the satisfaction of knowing that you have founded the business.
Buy a Business
Of course, you can also buy an existing business or franchise from a franchisee, which comes with its own benefits and drawbacks. Nevertheless, if you decide to buy a business from the founder or current owner, you will benefit in several ways.
With the purchase of an existing business, you will be buying an existing customer base and vendor base that may have taken years to build. You might even be able to arrange with the seller to stay on for a short time and transfer those relationships to the buyer. The property owner of the business premises may be open to negotiation regarding a favourable lease agreement. You get equipment and often stock and advertising material. The business model has already been established and you can thus focus on improvement, expansion, and marketing. Finance for part of the purchase process can also be arranged.
When you buy a business, you take a calculated risk that eliminates a lot of the pitfalls and potential for failure that come with a start-up.
How to Solve the Problem
Should you decide to buy a business, speak to one of our business brokers regarding available businesses, including franchise opportunities. Provide as much information about your business background as possible, in addition to what type of business you would like to buy. The business broker is bound to provide you with an array of choices and introduce you to businesses for sale that suit your particular personality, experience, interests, time availability, budget, location needs, and vision.