Why not just buy an existng business?

StevenS

I have never been personally interested in creating a start up business from scratch myself. I`ve usually geared myself toward being involved in buying established or involved in someone else`s start up project.
But it seems like most beginning entrepreneurs automatically think of doing a start up from scratch and not looking using an established business to dovetail their idea.
I`m wondering why that is? Is it just about the money that is needed to buy an existing business or are there other reasons why most entrepreneurs automatically think start up over existing business?
Thanks for your answers!

BizOptimizer

This is a GREAT question!  Especially for those that "don`t know where to start - need advice".  Generally, you get a cash flow, customers, a marketing plan that has had at least some success, vendor relationships, pricing options that have had some degree of success.
 
That is what I looked for when I first got out of business school.  I ended up buying a failed company, but it was:

Cheaper than a franchise.
Came with a small cash flow.
Didn`t come with all the franchise restrictions.

Now it is 7 years later, that business creates cash flow on its own and I am off to conquer bigger ventures.  Why do it from scratch when there are so many Betty Crockers?

WayneLiew

Like what you have said, most entrepreneurs start off with little cash and buying a business may sound intimidating to them. There are definitely a lack of knowledge when it comes to buying a business as well.
Bootstrapping seems to be the trend these days as aspiring entrepreneur want to cut back the risk and cash placed into their new ventures. Of course, there are still entrepreneurs who prefer to buy businesses.

StevenS

I have just finished an interesting book called, "The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By" 









There are a lot of myths and rose colored beliefs about starting your own business from out of your garage and ten years later being the next google or microsoft, etc. and this book bust a lot of myths wide open and gives a true picture with real data from U.S. Labor Department, US Census, and other credible research of what is really going on out there. 











There are more business start ups that start, flounder and die than there are people in the U.S.











A lot of people think that this is the greatest time to be an entrepreneur when actually in 1910 there were more business start ups and self employed people than there are today. 











He gives some good research as to why some start ups fail and the number one question you should ask yourself before going with a start up. 











There reason why I`m posting this here is because start ups are hard long journeys. There is a lot of pain that comes with building a start up. Buying a business that`s been established for some time has a better chance of succeeding that any start up. 











But of course it may cost more  in the beginning. 

WebJunky

just like money can be made in real estate with no money down or very little out of pocket, likewise is possible in dmall business.....but that said, yes the "illusion" of needing money is always there.  those that are clear and are not victims of the illusion may need the "know how".....