Should you set up or take over a company?

Would you like to embark on an entrepreneurial adventure? There are two possibilities: starting your own business or taking over an existing one.

It should be noted that these two processes are very different, and both have advantages and disadvantages that need to be taken into consideration.

In 2017, 591,000 businesses were created and nearly 60,000 were taken over.

To help you decide which action is best suited to your project, we're focusing today on business start-ups and takeovers!

The advantages of setting up your own business

The first advantage of creating your own entrepreneurial project is that you generally need to invest less at the outset, compared with a buyout.

Creating a company from scratch gives you real freedom in terms of its legal form, operations and other development strategies.

Secondly, setting up a company from scratch allows you to really learn your trade and your sector, and therefore get off to a gradual start.

While a company takeover may be affected by the departure of the former manager (loss of customers, etc.), this is not the case for a new business.

The advantages of taking over a company

First and foremost, it's important to remember that taking over an existing business allows you to get involved in an activity that's already up and running . This saves time, as the company often already has commercial partners, customers, staff, a brand image and production tools, which is obviously not the case when setting up a new business.

Taking over a business that's already up and running is also an opportunity for the entrepreneur to earn an immediate income, whereas a start-up project often requires substantial resources to compensate for the lack of income when the business is launched.

Last but not least, taking over a company gives you the opportunity to enter certain sectors in which it is currently very difficult to establish yourself.

Support for start-ups and acquisitions

Accompanying aids

First of all, there are a number of support programs available for new business start-ups and takeovers.

These include :

• NACRE or Nouvel Accompagnement pour la Création et la Reprise d'Entreprise (New Support for Business Creation and Takeover). This assistance is aimed at the unemployed who are re-entering the workforce, as well as those eligible for the ACRE. Note that this assistance is now regionalized.
• ACRE or Aide aux Créateurs et Repreneurs d'Entreprise.
• The 5 Days to Business course.
• And the EPCE or Evaluation Préalable à la Création ou Reprise d'Entreprise (Preliminary Assessment for Starting or Taking Over a Business ), which gives you an opinion on the feasibility of your project.

Tax incentives

Tax exemptions are also available .

Certain types of aid are onlyavailable tonew companies setting up in specific areas: for example, Regional Aid Zones (AFR) and Rural Revitalization Zones (ZRR).

It is also possible for new businesses to benefit from discounts on the Cotisation Foncière des Entreprises or to be granted a flat-rate exemption for the first 3 years of business.

For all companies, whether new or taken over, other tax breaks exist, notably for Young Innovative Companies whose R&D expenditure represents at least 15% of their total expenditure.

These tax breaks can also be extended to the company's managers and other partners. For example, they can benefit from tax reductions linked to the creation or capital increase of their company. They can also benefit from a reduction in their wealth tax (ISF) if they subscribe to the capital of an SME.

Financial assistance

Finally, financial assistance is available for business start-ups and takeovers.

These are of several types:

• Bonuses: numerous bonuses are available to business start-ups and takeovers, such as the regional development bonus, OSEO aid for innovative projects, the agricultural guidance bonus, business start-up aid for disabled people, the Regional Business Start-up Bonus (Prime Régionale à la Création d'Entreprise or PRCE) and the Regional Employment Bonus (Prime Régionale à l'Emploi or PRE).
• Loans: cash loans are also available to entrepreneurs. These include the Prêt à la Création d'Entreprise provided by OSEO, the Prêt NACRE, solidarity loans and Prêts d'Honneur to finance a company's long-term needs.
• Loan guarantee or equity investment: Finally, it is also possible to use equity investments or other loan guarantees.

In conclusion, the choice between setting up a new business or taking over an existing structure depends solely on the entrepreneur's vision and what he or she is looking for!