Advantages and Disadvantages of Starting Business

Categories: BusinessReputation

There are both advantages and disadvantages to starting up a new business. In order to decide if the business is right for the company, it’s important to weigh the factors below:

  1. Established reputation The company has huge worldwide success for many years. As the reputation is already established, our new business will have a good foundation. Soon after, we can focus much of our efforts on building and expanding the business.
  2. Existing capitals Since we already have the existing customers, contacts, suppliers, staff and equipment, there is a saving on time, energy and money when we start magazines.

  3. And the solid client base and contacts can help to maximize the success of the new business. So, it’s very beneficial for starting the related products.
  4.  Established professional work team The professional work team is already built. As the existing employees have expertise and experience, they are more familiar with customers’ needs and wants, so we’ll have opportunities to add improvements, then increasing the chances of higher profitability is much sooner .

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  5. Lower start-up costs One of the most favorable aspects to starting magazines is the drastic reduction in start-up costs.

Because of the existing capital, we have no up-front cost or supply cost. We estimate our cost is $3. 00 per issue, which is much lower than the market average cost $4. 50. 5. High profit Besides the lower cost, advertising revenue will be generated by selling the advertisements. However, there are also disadvantages affect the new Business.

  1.  Intensive competition In magazine market, the primary competition is on the basis of price.

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    And a very small difference in price will be noted by consumers. So, gift and promotional deals may be the popular ways to attract customers.

  2.  Technology trend The current advancements of technology allow companies to release devices which allow consumers to download e-books. And the accessing to the internet and new technological devices influence the demand for magazines. So, it’s important to consider what we can offer to win over customers from the competitors.
  3.  Financial risk The more important source of risk for most entrepreneurs is financial risk. Our investment is about $125,000. If our business doesn’t succeed well, the tendency is we won’t be able to have a return on investment.

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Advantages and Disadvantages of Starting Business. (2020, Jun 01). Retrieved from

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