Are You An Entrepreneur If You Buy Your Business?
To buy or not to buy? That is the question.
When considering the pros and cons of buying a business rather than building it from scratch, is the entrepreneurial label one of them? As a business-owner, how important is this word to you?
Online articles target entrepreneurs as the free spirits of the business world. They can build entire business empires out of nothing. What does it take to be an entrepreneur? Can any business-owner go by this title?
When it comes to buying or selling a business, what makes you an entrepreneur?
Buy your business
When you buy your business rather than start it from scratch, you inherit the structure, employees, debts and loans and existing customer base from the owner before you. Crucially, you also inherit the brand.
It is less risky to buy your business because of these factors. A pre-existing, recognisable brand image can be one of the great advantages of deciding to buy an existing business, rather than create your own.
For instance, banks are more likely to lend to existing businesses; all the legal work has already been done for you; there’s no need to research and design a business model from scratch; you can learn from the previous owner about the ups and downs of the business; and you can benefit from immediate cash-flow.
However, from an entrepreneurial point of view, this means a lot of the creative work has already been done for you. In a sense, you don’t get to leave your mark on the company in the same way.
On the other hand, you might have bought the business with the view to rebranding it. Immediately, this move reeks of entrepreneur. It is imperative that you understand the market you have just bought into.
Why is the current brand failing? How should it be rebranded? Is a new logo, colour scheme or entire business philosophy required? Perhaps the company was previously marketing to the wrong audience. As the buyer, you take on the creative, entrepreneurial role of Big-Bold-Decision-Maker.
Build your business
Typically, entrepreneurs are associated with start-ups and building their business from scratch.
When 80% of all start-ups fail in the first five years, however, you can understand why it can be more appealing to simply buy an existing company. It is less risky.
Are the owners of these failed businesses entrepreneurs? Clearly, they weren’t successful entrepreneurs. But they did have an idea, run with it and build on it. They had the creative spirit and the drive to make it happen.
What are the advantages of building your own business? For a start, you get to decide everything. From the product you sell to the way you market it, to the brand as a whole, you are in charge. You build the company’s values from scratch.
Of course, starting your own business rather than buying it can have its downsides. Most start-up owners don’t start to make money for the first three years. In addition, they must be prepared to sacrifice their personal life by dedicating time, energy and resources to the venture.
Are you ready for that? This is a decision that does not just affect you, but your family as well.
Grow your business
Real entrepreneurs are people who are good at business. People who can take something good and make it great.
Buying a business may not necessarily be the creative way in, but that doesn’t mean it’s easy or that the job doesn’t take creative mind-set, willingness to take risks, or a firm understanding of business environment.
Whether you owned your business from the beginning, or if you bought it at a later stage in its development, the goal is always to grow your business, better your product or service, and see the results on the bottom line.
What do you think?
Does buying a business stop you from qualifying as an entrepreneur? Is this word important to you or an irrelevant label?