With the start of a new year comes the opportunity to dream new dreams, set new goals, and revisit old ones. For many, the dream of owning your own business moves back to the forefront of your goals, asking for the attention it deserves. Often though, this stirs up more questions than answers – the first being, “Is it a good idea to start a new business in 2022? Or should I buy an existing one?”
As you head into the new year, ask the following two questions to help you evaluate buying an existing business versus starting a new business in 2022.
What Type of Entrepreneur Are You?
Most successful businesses progress through common stages over time, and different stages can uniquely benefit from the different leadership, communication, and entrepreneurial skills found in different types of entrepreneurs. Additionally, different types of entrepreneurs may naturally be attracted to companies at various stages.
There are three main types of entrepreneurs: Creators, Builders, and Operators. You can identify which type of entrepreneur you are based on a few key characteristics.
- Passionate and enthusiastic about a specific idea or product.
- Brimming with ideas for various types of businesses.
- Focusing on one idea or project at a time is a struggle.
- Typically a very good salesperson; can grow a business around a solid product or idea.
- Pushes the growth of the business and motivates employees to do the same.
- Experience great satisfaction from the “thrill of the hunt” and seeing the company grow.
- Skilled at putting processes and procedures in place to get (and keep) the company organized.
- Attention to detail means finding opportunities for improvement in the business.
- Does not become “lost” in the details, but keeps long-term growth goals in mind.
You may find that you overlap across these different descriptions or types of entrepreneurship, but overall, identifying what primary type of entrepreneur you are will help identify how you might uniquely contribute to the different stages of a business’s life cycle (i.e. a startup vs an existing business).
Consider that starting a business from the ground up requires an all-in passion and enthusiasm that is committed to choosing the business over all other obligations (especially in 2022). If you are a Creator (and maybe a Builder), this likely motivates you more than it concerns you. With the right idea or product, a startup may be a path to further pursue.
On the other hand, perhaps you are interested in owning, running, and growing a business, but the pressure of getting (and keeping) a startup off the ground in 2022 sounds a bit beyond what you desire. If you are a Builder or an Operator type of entrepreneur, buying an established business will allow you to continue building and growing on an existing foundation rather than committing to the all-consuming nature of starting a business from scratch.
What Are You Passionate About?
Consider the kinds of skills, knowledge, and experience you have (which will also help you identify your entrepreneur type), and then brainstorm interests, products, or services that you care about. Next, look into businesses for sale in those industries to see if anything looks like a good fit.
If you are passionate about a truly groundbreaking business idea, that may mean that the kind of company you want to own does not yet exist. In this scenario, starting a business may be your best – or only – option.
Remember that starting your own business vs buying an existing business is not so much a matter of how passionate or how “good” of an entrepreneur you are. Rather, it is a strategic decision about what kind of entrepreneur you are and how you can most effectively put that passion and skillset to work.
If you are considering buying or starting a business in 2022, give us a call. Unlike other brokerage firms, over half of Viking M&A Senior Advisors have been business owners, so we have a real understanding of what it takes to buy a business and to build a business from scratch. If it turns out that buying a business is the best option for your goals, we can help you navigate the process of not just buying a business, but also identifying the business and seller that are the right fit for you.
- Buying a Business vs Starting One: Pros & Cons from Experienced Business Owners
- 3 Types of Business Owners: What Type Are You?
- LLC vs C-Corp vs S-Corp: Choosing a Business Structure