L'ABC de l'écosystème entrepreneurial québécois
Three Ways to Start a Business
Each way of starting a business has its own advantages and disadvantages. Make sure you choose the option that best suits your needs and goals.
Start from scratch
Starting a business based on your own idea is the path chosen by most entrepreneurs. You develop your idea and manage the activities required to launch the business, giving you full control over your venture.
Advantages
Greater Freedom in Decision-Making
Changes can be implemented relatively quickly.
Start-up costs can be adjusted more easily if necessary.
Disadvantages
Planning the launch of the business can be quite time-consuming.
There is no established customer base; one must be built from scratch.
Starting from scratch can involve greater risks, depending on the type of business.
Financing may be difficult to secure.
Purchase the assets or shares of an existing business
There are two main ways to purchase an existing business :
1. Purchase the business’s assets (e.g., furniture, real estate, goodwill, trademarks, etc.). You will then need to choose a new legal structure under which to operate the business and transfer the acquired assets to it.
2. Purchase the business’s shares (if it is a corporation). In this case, you acquire the entire business, including its history, assets, and liabilities.
Advantages
You start with an established business foundation.
An existing customer base is already in place, along with an established network of suppliers and distributors.
You benefit from the credibility and good reputation built by the previous owner.
Before finalizing your offer to purchase, you should conduct thorough due diligence and carefully assess the company’s financial health.
Depending on the business you acquire, the risks involved are often lower than with other ways of starting a business.
Disadvantages
You must honour the commitments made by the previous business owner.
It may be more difficult to make changes within the business.
Establishing credibility may be more challenging if the previous owner did not have a good
Acquire a franchise or dealership
A franchise is a licence granting the right to use existing intellectual property, such as trademarks, distinctive signs, or know-how, for the sale and distribution of goods or services. Acquiring a franchise gives you the right, for a specified period, to operate your business using the franchisor’s intellectual property rights.
You must therefore enter into a contractual agreement with a franchisor. Depending on the terms of the agreement, this contract generally allows you to sell a product or service within a protected territory.
In practice, you own and manage your business and assume the associated risks, while remaining accountable to the franchisor and paying royalties. If you acquire a franchise or dealership, you will likely need to incorporate your business, depending on the franchisor’s requirements.
Advantages
The risks are generally lower.
The target customer base is already defined.
The brand is already established.
Disadvantages
The cost of acquiring a franchise is often high.
The franchisor’s products, services, and standards must be followed.
There is limited room for entrepreneurial creativity.
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