Let’s find out the 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 to achieve his personal objectives.
Also, how do the advantages and disadvantages of starting a new business option compare with those of entering the ongoing business? Is 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 to be.
But there are risks of failure because of the wrong selection of activity, site, strategy, and the like. Presented here for some reasons for and against starting a business from the scratch:
Advantages of starting a new business
- Freedom to plan the SB (small business) as the owner details
- Can create the type of physical facilities as per the preference of the owner
- Select the strategies to overcome the competitive environment
- Can make impressions & goodwill
- Need not carry any past odds & liabilities
- Can recruit skilled & professionally-oriented office staff.
- Can take advantage of the late? technology in selecting equipment, materials, and tools
- Can utilize the most recent processes and procedures
- Enjoy profit from the justified operation – not to be shared.
- Can procure fresh inventory at a competing price
- Can freely design the preferred management information system
- Select right market & clientele
Disadvantages of starting a new small business
- Risk of unproven operations
- Problems associated with assembling the composite resources- including location, equipment, material, and personnel.
- Problems in establishing the basic accounting & controls
- May suffer from improper or inadequate planning
- The difficulty of building contacts with suppliers, clients, bankers, etc.
- No past knowledge of the reactions of the competitors
- Need to undergo a difficult process of selecting and training a new workforce
- Lack of an established product line
- Risk of unproven operations.
- Production problems associated with the startup of the new business
- There may be a lack of an established market and channels of distribution
- May suffer from inexperienced employees in addition to bearing the cost of training the new recruits
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