Of the 11,000 plus new businesses set up each year in Switzerland, only about half survive the first 5 years, the rest have disappeared from the market within a short time. We are in an environment in which the survival rate for young companies is obviously overestimated. This shocking statistic is based on three factors that new entrepreneurs are often overlooked: Poor location and / or poor product, insufficient capitalisation and excessive demands.
Anyone starting a business, usually prepares meticulously at the start and creates a detailed business plan – one would assume. Studies show that the higher the means needed for a start-up, the greater the chance of survival - the more financial resources required, the more time is spent in preparation. These types of business are not established as often, but they survive more often.
In addition to the start-up companies, about 11,000 businesses in Switzerland are passed on or sold to a successor each year. This provides many opportunities for individuals who want to start their own.
The chances of success in corporate purchasing as opposed to starting up is better in many cases: The buyer of an existing company can assume that the owner of the company has chosen the right location and included the appropriate products in his portfolio, otherwise the company would have stopped operating long ago. To overcome the last hurdle - the excessive demands - the majority of business owners have at their disposal the new owner with advice and assistance.
When a company is being set up, the use of financial resources is often underestimated, this is much less the case when buying. The demand for liquidity can be estimated much better. In addition, the buyer already achieves the first turnover on the day he takes over and he has the sales history from the past. The risk of overly optimistic revenue and profit margin forecast is significantly lowered.
Even with a purchase there is still the entrepreneurial risk. Buying, however, is a promising alternative to starting up.
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