Discuss the advantages and disadvantages of buying a business as opposed to starting one from scratch. What two ways can one buy a business and which one is preferable? Why?

There are many advantages and disadvantages that can come with buying a business as compared to starting one from scratch. I will answer this question in regard to my personal choice of business which is the movie and media industry:

Advantages:

Some advantages of buying a film company instead of starting one on my own would be that I already have the equipment and facility that I need, and possibly employees who are well trained with the equipment and the way in which the business runs.

The business may already have a strong customer base that will probably transfer over once someone new buys the company, as long as the same quality or better service is provided.

The business has already been established and may be making a profit. It should not take as long to start a profit when you buy a company that is already up and running versus taking all the time and steps needed to even get the company established, not to mention marketed to the public.

Disadvantages:

If the facility or equipment is really old, you may have to immediately invest in renovations and equipment updates before you can carry 0n with the business or profit.

It may be harder to mold the company into your own idea or vision because the old vision and mission of the company are still instilled in employees and customers of the past who you are still dealing with.

Even though there are some disadvantages that can come with buying a business as compared to starting a business from scratch, I believe that it is important for a person to make the best decision for them. Depending on the individual, you may be able to turn those negatives into positives when it comes to buying a business.

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1 Comment

  1. I like how you answered this question from your personal point of view in the field you would like to start a business. The pros and cons you thought of off the top of your head from experience in the industry seem right in line with what I found in my research. However, I didn’t get a very strong sense of which method you would prefer which would be nice to know since you approached the topic from a personal viewpoint. It is a tough decision obviously and there are so many uncotrolled variables with the different businesses which may be available for purchse, so maybe that is why it is hard to decide.


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