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Buying a company vs. starting your own: What to consider

On Behalf of | Mar 21, 2023 | BUSINESS & COMMERCIAL LAW - Mergers & Acquisitions

When someone determines that they want to start their own company, they have two basic options. The first, and the one that many people choose, is just to start their own. They may take business loans or find investors to launch the company. Others will simply start the company on the side and then scale it up as it becomes more profitable – until it can become a full-time operation.

But the other option is to acquire a company that already exists. Why is it beneficial to buy a company?

You already have name recognition

First of all, a lot of the branding has been done for you. The business has name recognition. You may already have a customer base. Brand new companies tend to struggle to build up this kind of customer base, but you can jump to the front of the line if you acquire a company.

You can already see if it’s generating income

Another thing to consider is that the business you are acquiring is a proven model. It is making money. You can calculate how it could make more money or different ways to cut costs, but you do know that there is a market for those goods or services.

It comes with ready-at-hand assets

Finally, acquiring a company can be beneficial because it comes with the assets needed to run it. This could include things like machines, inventory, parts and materials, or physical locations. It also includes employees who have already been trained to work in that business and know how to do so.

At the end of the day, both options can be beneficial. Business owners just need to know what steps to take and how to put themselves in the best possible position moving forward.