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When exploring business ownership, two of the most common paths are buying an existing business or launching a franchise startup. Both options come with unique advantages and risks, and choosing the right path depends on your skills, financial situation, and long-term goals.
In this article, we’ll break down the pros and cons of each option, highlight key risks often overlooked by buyers, and share insights on how to decide which model is the best fit for you.
The Promise and Pitfalls of Business Acquisition
On paper, acquiring an existing business seems like the fastest way to generate cash flow from day one. The company already has customers, employees, and systems in place. But the reality is often more complex.
- Revenue declines are common: Research suggests that 70–90% of small businesses experience revenue drops after an acquisition.
- Customer attrition: On average, businesses lose 2–5% of their customer base after a change in ownership. Loyal clients sometimes leave, employees may resist new leadership, and operations can be disrupted.
- Seller motivations: Often, owners polish financials in the last few years before selling to command a higher valuation. This means you may be stepping into a business that’s been optimized for sale, not for long-term sustainability.
The takeaway? Acquisitions can be profitable if you find the right business, perform thorough due diligence, and have the skills to operate and grow the company. But without careful vetting, buyers risk paying top dollar for a declining asset.
Why Franchise Startups Appeal to Corporate Professionals
Franchise startups offer a very different entry point into business ownership. Instead of taking over an existing operation, you’re building a new location under a proven system.
For many first-time entrepreneurs—especially those coming from corporate backgrounds—franchises provide critical advantages:
- Built-in support: Training, coaching, and operational playbooks help reduce guesswork.
- Marketing systems: Franchises often handle brand-level marketing, giving you a jumpstart on customer acquisition.
- Peer network: Other franchisees provide real-world advice and best practices.
While you won’t inherit customers on day one, you also avoid the hidden risks of acquiring a declining business. With the right franchise match, you can build equity in a structured environment while benefiting from ongoing support.
Assessing Fit: Which Path Is Right for You?
Ultimately, there’s no universal “right answer.” The best choice depends on aligning your skills, resources, and lifestyle goals with the right opportunity.
Ask yourself:
- What are my strengths? Operators with industry knowledge and turnaround experience may thrive in acquisitions. Those who prefer structure and coaching may do better in franchises.
- What’s available in my market? Acquisition opportunities are limited to what’s for sale nearby. Franchises provide a broader set of industries and concepts to choose from.
- What’s my risk tolerance? Acquisitions offer immediate cash flow potential but carry higher risk of decline. Franchises require more ramp-up time but offer structured support.
Beau Eckstein emphasizes the importance of business assessments and skill alignment before making a decision. Many candidates start looking at one option but discover that another path fits their profile much better.
Key Takeaways
- Business acquisitions can deliver instant revenue but often suffer from customer loss, employee turnover, and hidden declines.
- Franchise startups offer structure, brand support, and a network—ideal for first-time owners seeking a proven system.
- Personal fit is everything—success depends less on the model and more on whether the business aligns with your skills, resources, and goals.