Pros And Cons of Buying Vs. Building A Business:What Experts Say

Which risk could make you more money? Is it buying an existing business or starting your own one? It’s an exciting experience to start a business on your own and be your own boss, but buying an established business lets you have a smooth startup. Entrepreneurs face numerous challenges, benefits, and risks when deciding where to put their money. To help you carry out the best decision, here’s what experts say about the pros and cons of buying vs building a business. 

How to Assess a Business Opportunity

Besides knowing the pros and cons of buying vs building a business, experts recommend that you should do an assessment first before wasting your time on the business prospects that aren’t exactly for you. Here are some of the things consider to help you evaluate a business opportunity:

Market Analysis

Business owners always figure out the market size as part of assessing a particular business opportunity. You need to do research and understand the market – how big it is and how big is the demand for it. 

Cash Flow Management

Before diving into a business leap, you must know about cash flow management and figure out the business strategy, including the startup funds.

Good Network Connection

Does the business have a good network connection with customers and investors? A well-established relationship with important people and companies will help you succeed and open more expansion.

Passion and Perseverance

Business involves not only a lot of money but also a lot of passion. Get to know if you will be working with people who will have the same passion and persistence as you.

Financial Aspect

It is very crucial to evaluate your resources first before putting your hard-earned money at stake.


With the presence of competitors, you also have to stand out by being unique. Evaluate your market edge. What is your exceptional selling point that sets you apart from the rest?

Risk Assessment

As you evaluate a business opportunity, never forget the potential risks that include the present economic status, competition, and natural occurrences. A market study can be a bit of a hassle, but it can help you see the pros and cons of buying vs building a business.

Management Skills

To ensure that a business will succeed, you need to make sure that you have enough management skills and that you are competent in running one. Getting into a business without having the necessary skills is too dangerous. If you are confident with your management skills, you can easily weigh the pros and cons of buying vs building a business.

Building Your Own Business

Business experts agree that putting up your own business from scratch requires a major responsibility and must be made with much preparation for timing, nature of business, and location. Despite some drawbacks, initiating your own business will make you an instant boss and in control of everything. Here are pros and cons to consider when building a business:

Pros of Building a Business

Over-all Control

When you start your own business, you can do whatever you want, and you decide on your own, which gives you full autonomy of your business.

Fewer Problems to Solve

Because you are starting from scratch, you won’t be dealing with current business issues left by former owners, so there are fewer problems that need fixing. You need not work out about bad public relations and unsatisfied personnel.

Creative Freedom

Building a business gives you more freedom in all your transactions and dealings. You will always have the final say regarding management decisions and setup and products and services. You are also free to determine your budget or cut extra costs without others’ approval.


You will have a flexible schedule when starting your own business and walking at your own pace. You can keep your day job, and other side hustles that fit your lifestyle yet gain full control of your business at the same time.

Cons of Building a Business

Financial Challenge

Starting up a business needs substantial funding. Unless you have lots of extra resources, you won’t be dealing with a fund dilemma. Big money is at risk, especially with the first years of operation.

More Workload

Establishing your own business entails lots of work. According to business experts, you should expect more hours of work each day before managing to launch a routine and control your time.

A lot to Learn and Prove

You need to cope with a lot of business learning, and you are expected to pick them up as quickly as you can so you can get along with competitors. It may take you more effort and energy to establish your own name in the industry.

More Responsibilities

You will be making every single decision when building your own business, and those decisions come with more responsibilities that will surely impact your business.

Buying an Existing Business

Buying an existing business entails purchasing an already established business or acquiring a franchise already operating on the market. This business has already developed effective operational dealings and brand recognition. You may encounter lots of partners in the industry and not decide on your own, but you get the advantage of an earlier return on investment. Here are the pros and cons of buying a business:

Pros of Buying an Existing Business

Reduced Startup Time

You can start the trade as quickly as possible when you buy an already established business. You will also save time hiring employees, dealing with the inventory, or looking for the best suppliers. You will enjoy the benefit of hiring trained employees and an organized protocol set.

Established Brand

You will exert less effort with branding. Experts say that it is a struggle to make your own brand and make customers trust it right away. The startup phase is the most challenging part when introducing a brand, but with an already known brand, all you have to do is continue living up to its expectations, thereby saving you time and money.

Stable Market

When buying a business, you can skip studying the market because the products and services of the company were already introduced and embraced by the market. With that, you are confident of running the business without worrying about how the market will react to what you have to offer.

Promising Income

You are assured of quick sales and profits when you buy an existing business compared to starting a new business venture. You won’t need a long time to build revenues because of the market standing that goes with the business.

Business Financing Opportunity

You can easily produce the funds you need when purchasing a business. You can use business assets to prove your stability and capacity to pay. Banks and financing institutions less likely to give a chance with startup businesses.

Cons of Buying an Existing Business

Higher Startup Cost

Business owners won’t sell an existing business at a cheaper cost, especially if it goes well in the current market. Depending on the business status, owners may demand a substantial amount of money. Likewise, a struggling business may be priced lower but can also be difficult to manage.

More Problems to Fix

You might be dealing with more problems that need fixing when you buy an existing business. You might encounter issues that include outdated equipment, difficult employees, debt issues, and relationships with suppliers. Some entrepreneurs manage it by implementing big changes.

Scam Issues

There are fraudulent sellers everywhere, and you might fall victim and get scammed by promises and fake investments. To avoid it, you need to take a lot of time to review all the necessary documents and ensure that financial data is not misrepresented.

Vision Conflict

An existing business has an established vision. If it doesn’t fit you, you need the necessary changes that will best reflect your goals for the company, and it will surely cost you time and money. Unlike when you start on your own, you are very clear with your vision from the start. You might find it hard to carry out your vision on a business with an accustomed culture.  


Business experts agree that there is no such thing as a risky investment, but only a risky investor. There are many benefits and drawbacks to starting your business from scratch and purchasing a franchise. Whatever you choose depends heavily on the business type, market and growth opportunities, financing options, vision, and lifestyle. Given the business stakes that you will encounter, it is important to assess your business goals before making a big decision. Hopefully, with all the pros and cons of buying vs building a business, you have already decided which way you should go. Whether you choose to build a business or buy an existing one, do your best to make it a fulfilling entrepreneurial journey!

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