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Purchase An Established Business vs Building Your Own Business: What’s Better

At that point in your life, when you’re tired of the normal 9-to-5 job? Maybe it’s time to consider being your own boss. Of course, owning your own business will come with challenges, though. For example, as you transition over, do you buy a business that’s already established or build your own business from the bottom up? 


Building your own business is a remarkable feat, and we have great respect for individuals who’ve done this. Starting a business and developing it into a successful revenue stream is impressive, but it takes a lot of time, effort and resources. Buying an established business doesn’t typically require as much time and effort as building one from the ground up. Buying an established business offers you the benefits of an instant revenue stream, and although you might need to make some changes, when you make wise investment choices, you’ll still get something that has a firm foundation. 


So, should you buy, or should you build a business? In this article, we’ll give you the pros and cons of the two options to help you make a more informed decision.

Considerations to make when buying or building a business

We always like to consider the contributing factors on both sides before making a decision. Here’s some essential information you’ll need to know before deciding whether to start or purchase a business:

Buying an Established Business

  • Existing customer base
  • Established brand and reputation
  • Proven business model
  • Immediate cash flow
  • Trained staff and management
  • Existing supplier relationships
  • Known financial performance
  • Less risk and faster return on investment

Building Your Own Business

  • Full control over business direction
  • Flexibility to implement your vision
  • No inherited issues or outdated systems
  • Opportunity for creativity and innovation
  • Gradual growth at your own pace
  • Lower initial costs compared to buying
  • Potential for higher long-term profits
  • Personal fulfilment from creating something new

Pros of Purchase an Existing Business

Here are some of the advantages of buying an existing business:

  1. You Already have a Successful Business Model

Let’s be frank: you’re not going to want to buy a sinking ship, right? You’ll buy a business that’s succeeding. Here’s where the benefit lies. You’re buying a business that’s already performing, so, in essence, you’re just taking over ownership and management. 

When you consider buying a business, we’d suggest using a business brokerage like Lloyds Business Brokers. They’ll help you find businesses that are flourishing with successful business models

  1. You can Hit the Ground Running

When you start a business from scratch, there’s a never-ending list of tasks you need to do. For example, you’d need to sort out a business plan that requires market research and capital to fund, find reliable and experienced employees, and build a client basis. Buying an established business means that you don’t have to do any of that because most of these tasks would have been taken care of already. 

  1. Your Branding is Sorted

Building a brand is not for the faint of heart. It’s one of the most time-consuming and resource-heavy parts of running a business. Even with all your hard work, it can take years to create a brand people recognise and love. By buying an existing business, you don’t have to stress about branding. You can focus on growing other parts of your company. Plus, you can always rebrand the business to add your personal touch.

Cons of Buying an Existing Business

On the flip side of all the benefits of buying an existing business, here are some of the cons:

  1. The Initial Investment Might be Expensive

Buying an existing business can be pretty expensive. Think about all the funds that go into building a business from the ground up. While you do not have to do all the hard grafting, you’ll definitely pay for it when you have an established business. 

  1. A Change in Operations Might be Needed

There are always unexpected challenges when there’s a change of ownership in a business. Sometimes these changes can be difficult and time-consuming. For example, staff might not be on board with the change of ownership. Which in this case you’d need to get HR involved and create a plan to resolve this which can take time away from growing the business. 

Pros of starting a business from scratch

For those with a drive to create something of their own, it’s a lot of hard work, but it’s not without its benefits, which include:

  1. You’re your Own Boss

This might or might not surprise you, but a large number of Australian employees dislike their managers for some reason. Starting your own business from scratch will allow you to be the boss. You’ll have a say on what goes on and how operations work. You’ll also never have to deal with a manager or boss again, and you can make a difference for your employees by giving them a boss they enjoy and respect. 

  1. Your Schedule is More Flexible

As the owner of the business, you’re free to set your own schedule. You can set the start time and end time for your business day. Whether you want to work weekends or weekdays, the choice is yours. Just keep in mind that for early business to succeed, hard work is essential, so there’s a good chance that you’d need to work longer hours to build a good reputation. 

Cons of Starting your Own Business

While starting up a brand new business is incredibly rewarding, here are some of the cons you’ll find along your journey:

You’re in it alone

One of the biggest difficulties of starting a business from scratch is that you’re solely responsible for its success. At first, you’ll need to lay the groundwork, which means determining the business structure, acquiring clients, and marketing the products. This can be a lonely time for business owners and is often a reason for many businesses failing in the first year.

There’s No Job Security

Unfortunately, newer businesses rely on their capacity to work and get clients. If you’re unable to get clients, then your profits will be down, meaning you will have no paycheck at the end of the month. When you work for another person or buy an existing business, there’s job security because of the existing cash flow. 

Final Thoughts

So, to sum up our thoughts, buying a new business is tough, but it can be extremely rewarding as well. However, buying an established business will set you up to hit the road running. So, the choice is yours? Do you want something that’s already established, or would you rather tackle the challenge of building it yourself?