Thinking of starting a business? You’ve got lots of decisions to make before you open your doors. Will you cater to businesses or consumers? What type of products or services will you sell? And then…what type of business is best for you?
Essentially, you have 3 options when it comes to business types. Let’s dive into each.
Buy an Existing Business
Every day, someone is selling an established business, maybe because they’re retiring or ready for a change. The biggest advantage of buying an existing business is that you have less risk. After all, an existing business has already established its reputation, hired and trained its employees, and begun to turn a profit.
The drawbacks are that sometimes there are negative reasons an owner wants to sell that may not be obvious beforehand. For example, years ago, my husband and I bought an ice cream business just before the recession hit. Then we found out no one wanted to pay $4 for a bowl of ice cream. Lesson learned. Also, you may be stuck with antiquated equipment that soon needs replacing.
If you’re looking for a business that’s already gone through its growing pains, consider finding a successful one for sale in your area.
Purchase a Franchise
Another option for those who aren’t interested in starting from scratch is a franchise. Buying a franchise, you get all the branding, inventory, systems, and processes already laid out for you. You have much fewer decisions to make.
When you buy a franchise, you are buying into existing brand awareness, and your franchisor will support you with marketing, training, and support.
The drawback here is that you often have little room for creativity, as franchises are required to follow the rules pretty precisely.
Start a New Business
If you don’t need the easiest path, starting a brand new business might be the best choice. You can craft exactly how your business runs, who you’ll work with, and what your store or office will look like. You’ll have complete control.
With that control, of course, comes more risk. There are no guarantees with any business, but least of all with newly established ones. You’ll work long and hard for the first few years to get your business up and running, and then it will get easier.
Consider your interests and time availability. If you’re limited on time and want to hit the ground running, consider an existing business or franchise. If you’ve got energy to create something new, starting from the beginning might be best.