Question

1. If you were to consider yourself and entrepreneur, would you rather start your own business or buy an existing one? Justify and explain your answer thoroughly.

2.. Given y our answer to question number 1, would you utilize a venture capital firm? Why or why not?

Answer 1

It can be considered for various reasons but the main reasons are as follows:

When buying an existing business tge entrepreneur need not work hard and gain reputation to that business because the previous owner has already done groundwork and reached consumer's attention.The only trick lies for the entrepreneur is what is the step which he take to make the next step is a big tagline and how efficiently and effectively he does business with what the previous owner had handedover to him.

In business terminology we say organic and inorganic growth.organic growth refers to an entrepreneur developing his own products and marketing himself with his own strategies whereas inorganic growth refers to purchasing an already developed entity and strategize it to take to the next level.In terms for growth inorganic businesses grows and reaches faster than an organic business.Since inorganic businesses yeild is more it has its own pros and cons.The above stated only potrays inorganic businesses pros but not cons.In inorganic businesses the entrepreneur does not have attachment towards that business therefore he lacks depth in that particular business matters and there are possibilities that the previous owner would have had some loop holes in his business and in order to get rid of those he might sell the business.Therefore the entrepreneur must be careful in choosing business.In organic business though growth is slow but the entrepreneur has nook and corner knowledge and tact to carry on his business because he has expirience and skill to run the shop.There aslo another advantage is that the entrepreneur do business according to his choice whereas in inorganic business the entrepreneur has his ideas which should simultaneously find an entrepreneur who does business in that intrested field and he is in an idea to sell his business. The higher the return higher the risk and lower the return lower the risk.In other words starting own business refers to organic growth and buying an existing one refers to inorganic growth.

2. If the entrepreneur wants to start his own business then venture capital will be more useful than buying an existing business.A venture capital is one if the form of raising fund.It simply means a person who has potential business idea but does not have funds to shape his idea and there is another person who is financially strong but doesn't have any business idea.Therefore the financially strong person identifies the potential idea.This person is called as venture capitalist.The profit's major portion goes to venture capitalist and the remaining goes to the entrepreneur.