What are the advantages of buying a business rather than starting one from scratch?

Anonymous
timer Asked: Nov 9th, 2015
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Question Description

What are the advantages of buying a business rather than starting one from scratch? What are the advantages and disadvantages of owning a franchise?

Tutor Answer

nick1982
School: University of Maryland

Thank you for the opportunity to help you with your question!

The main advantage of buying a bussiness is that with that bussiness you also buy the clientel . 

Also another noteable advantage is that you buy a functioning entity thus you inherit the know how that company has (that goes for both stasionary equipment aswell as human resources) 

You skip the costly proccess of building a bussiness from scratch thus planning the way the bussiness will work and execute that plan . 

 you dont have to hire people , wait for them to ajust in their positions and learn the job you just have to manage them and maybe fire those that are not up to your standars 

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A franchise primary advange is the popularity and recognision of the name it provides . You get to benefit from that and its the main reason franchises exist in the first place 

A franchise will provide a certain plan of which you need run your bussiness thus you skip all the hard work of building by yourself 

Also will provide the know how of that bussiness to run so you dont have to figure it up yourself

Also sometimes franchises offer access to providers that you normally wouldnt have due to their volume (and offer to prices you ll normaly wouldnt achieve again due to volume)  

The main disadvatage of a franchise is the cost (you have to pay them a fraction of your profits and an initial capital to get the name) which raises the maintance cost of your bussiness 

Another disadvatage is the lack of deviation . You have no room to execute your own strategy you have to follow theirs at all aspects . 

Please let me know if you need any clarification. I'm always happy to answer your questions.

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Anonymous
Thank you! Reasonably priced given the quality not just of the tutors but the moderators too. They were helpful and accommodating given my needs.

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