Advantage and Disadvantage of Business

310 Words2 Pages
The advantages and disadvantages of starting new business: Advantages: - Starting up with the clean slate, don’t have employee problems, previous debt, and contract problem. - Starting up with new technology or rule. For the existing business, it is difficult to replace the new system or use the new technology. - Can start up with new, unique product or service. For the new starting business, if we can provide the different product or service to the market that those product unavailable before, mostly we can compete with the existing business. - Starting up with limited capital. If we start up the new business, we can limit our capital even though limit the capital for loss, however for franchises or others types of business, if loss, we have to loss more money on buying the license or franchises from original company. - The owner is in control of all aspects of the business, including the location and what the operation is to look like. - Business Image - you create the business image you want. Your way. Disadvantages: - Start-up businesses are typically more costly and risky since there is no proven formula. - Has no initial name recognition, we cannot guarantee that the products or services will accept immediately by the market. - Need time for established and provide positive cash flows. - Difficult to finance, new starting business cannot immediately provide assets, sales and cash flow unlike existing business or franchises. - Cannot easily gain revolving credit from supplier and financial institutions. Existing business already have line of credit to transfer cash for business. - Don’t have experienced managers and workers. The new starting business is difficult to find the experienced workers. We have to spend time for training and also provide some experiences for them. - All of the details of starting the
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