Advantages and disadvantages of starting a new business

In considering the possibilities of establishing a new enterprise, one should recognize trial he will have more freedom of choice in defining the nature of the business than if he purchases an existing firm.

It should be remembered that there are both pluses and minuses in choosing this alternative. One should view a particular business in terms of whether it will enable him achieve his personal objectives.

Also, how do the advantages and disadvantages of starting a new business option compare with those of entering the on-going business? In there – on this basis -a reasonable opportunity for success?

Advantages and disadvantages of starting a new business

Starting a business from the scratch has both good as well as bad points. One who starts a business can promote, design, organize, direct and run the same as he desires it be.

But there are risks of failure because of wrong selection of activity, site, strategy and the like. Presented here under some reasons for and against starting a business from the scratch:


Advantages of starting a new business

  1. Freedom to plan the SB (small business) as the owner details
  2. Can create the type of physical facilities as per preference of the owner
  3. Select the strategies to overcome competitive environment
  4. Can make impressions & goodwill
  5. Need not carry any past odds & liabilities
  6. Can recruit skill & professionally oriented office staffs.
  7. Can take advantage of the late?, technology in selecting equipment, materials and tools
  8. Can utilize the most recent processes and procedures
  9. Enjoy profit of justified operation – not to be shared.
  10. Can procure fresh inventory at a competing price
  11. Can freely design preferred management information system
  12. Select right market & clientele

Disadvantages of starting a new small business

  1. Risk of unproven operations
  2. Problems associated with assembling the composite resources- including location, equipment, material, and personnel.
  3. Problems in establishing the basic accounting & controls
  4. May suffer from improper or inadequate planning
  5. Difficulty of building contacts with suppliers, clients, bankers, etc.
  6. No past knowledge of the reactions of the competitors
  7. Need to undergo a difficult process of selecting and training a new workforce
  8. Lack of an established product line
  9. Risk of unproven operations.
  10. Production problems associated with the startup of the new business
  11. There may be lack of an established market and channels of distribution
  12. May suffer from inexperienced employees in addition to bear the cost training the new recruits


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