Buying an existing business gives you customers and a working product, but most startups fail within five years. Building from scratch lets you own everything and shape it your way, though 90% don't survive the first five years. The choice depends on how much risk you can handle and whether you want control or a head start.
Should you build or buy a business? Let's first talk about the case for buying a business. What seems really attractive to most people is the work is already done for you. There's already a customer base. There is a product or a service that's already working. There is potentially less risk. Most businesses, 9 out of 10, are dead within 5 years. Most startups, I would say. And so if you're thinking about it from that perspective, you might be able to reduce your risk. The case for against is if you don't do your due diligence, there might be hidden liabilities. There might be a bunch of debt from somewhere else, or there might be some issues with the company that are unforeseen. Now let's talk about the case for building. You can maximize your creativity in it. Whatever you want to do, let's say you're 100% owner or you have partners, you have a lot more flexibility when it comes to creativity. You can build the business the way you want it. The cases for against building your own business, so it just takes a lot of time and 90% of startups fail within the first 5 years. So do you have the risk tolerance? Are you able to handle the entrepreneurial roller coaster during the first couple years?
