Why Start a Business When You Can Flip One? Pros and Cons of Flipping a Business

Learn the pros and cons of flipping a business.

Starting a business from the ground up can be a great challenge. Even the most experienced and determined entrepreneurs encounter difficulties when establishing new business ventures. In fact, studies indicate that 9 out of 10 businesses will eventually fail after a number of years. This is primarily the reason why some entrepreneurs choose to buy an existing business and turn it around rather than start one from scratch.

Flipping a business can be easier than founding one. With the framework and brand identity already in place, it would take significantly less effort to make it successful. However, like everything else, flipping a business comes with its own advantages and disadvantages. Here are some of them.

The Pros of Flipping a Business

  • Finding a business to flip is a straightforward process. You can easily find businesses to flip by identifying a winning trend and then looking for underperforming companies that are not yet ready to capitalize on an impending change that is about to disrupt the entire industry.
  • It costs less to flip a business. When you buy into an existing business, you can continue to use its customer base and framework in doing business. You may need to upgrade or replace its existing technology but this would require significantly less money than launching a conventional startup.

The Cons of Business Flipping

  • It requires a lot of work. Despite the advantages of buying into an existing business, it still requires tons of work to realize its potentials. It will also require huge amounts of your time and energy so be prepared to commit yourself in rebuilding the business.
  • It can be expensive. While it may come with a cheap price tag, the business may come with some of the unexpected costs (risky investments, unprofitable clients, etc.) incurred by the previous owner. So, be prepared to incur some losses for some time before you can turn things around.

Flipping a business can be a profitable venture so do not be afraid to take risks.