Are you a professional in an industry who has dreams of starting your own business? Have you worked for many years as an employee, and now you want to take advantage of your savings to become a business owner? In either of these scenarios, you can take your first step on the entrepreneurial journey by owning a business yourself.
However, there is a huge difference between starting your own brand and buying one that already exists. In both scenarios, you become the owner of a company in Calgary, Alberta, but the approach and the possibilities are vastly different.
To help make your entrepreneurial decision easier, let’s talk about the main differences between these two ownership paths.
The Business Idea
If you have a great idea for a brand that is new and based on your specific passion, then the route you might choose to pursue is starting a new company. This gives you the freedom to design the product or service how you want and model the company to fit your leadership style. A lot of work will go into turning your idea into a reality.
When purchasing an existing business, you get to mostly skip the idea phase. Since the company is already operating, someone else has done the work of coming up with the idea. Now it is an operational company that you are choosing to purchase to become the owner and take it from there. Rather than spending years building a food service brand on your own, you can simply purchase an existing restaurant for sale in Calgary.
Funding Strategy
In both cases, you will need money to finance your objectives. Starting a business usually requires various expenses, whether that includes renting a building, buying equipment, paying for production, or other costs. You can choose to spend as much money as you want to build the brand, but you may need to seek out assistance from angel investors.
Purchasing an existing business usually requires a larger investment upfront than starting a new brand. That is because you are technically buying the company and all its operations after they have already been developed. This is where you can see the main differences between angel investors and venture capitalists. Angel investors tend to get involved in startups with their personal funds, while venture capitalists use pooled resources to make less risky investments say, for example, in a newly acquired but established business. Companies with a history of growth could make it easier for buyers to secure loans for their purchases.
Managing Operations
Every company in the world has operations. The way a brand conducts its business is unique to itself and is the result of whoever started the company and crafted the structure. When you start your own business, it is up to you to decide what operations look like. There is a heavy burden to figure this out quickly so that the brand will grow.
As a buyer for an existing business, the pressure of developing these operations is lessened significantly. While you may need to hone some processes or make adjustments to create a more efficient company under your leadership, the heavy lifting has already been completed. As long as the business you are buying is somewhat healthy and successful, you will simply step in to start managing operations rather than building them.
Which Entrepreneurial Path is Better?
What is the verdict for this question? Is it better to start a new business or buy an existing one? The answer depends on how you want to be as a brand owner. Do you prefer to build something yourself and guide it toward success in the industry? Or would you rather take over for a previous owner and continue what they have started?
There are pros and cons to both methods. Starting a business requires more planning, creativity, and intense work early on. Funding might be harder to obtain as well. But you get to reap the benefits of creating something yourself. Buying a business, on the other hand, requires a ton of research into the details of the company to see what needs to be done. It can also be more complicated to secure a loan, even if it is easier to obtain higher amounts.
If you are a person who is excited about the challenge of turning your dream into a reality, then starting a new business might be the right path. If you do not love the idea of building a brand and would rather take over for a business in a field you are interested in, then buying an existing company makes more sense. Both paths result in you joining the ranks of entrepreneurs in Calgary, Alberta, so the approach depends on your preferences and what level of work you are okay with doing.
