Buying a business or starting from scratch: the founder's trade-off

Quick answer. Buying a French fonds de commerce (business goodwill) means acquiring an existing customer base, turnover and banking track record immediately — but at a higher entry price and with registration duties (0% up to €23,000, 3% from €23,000 to €200,000, 5% above — Article 719 of the French Tax Code, CGI). Starting from scratch avoids those goodwill duties but means commercial risk and a ramp-up delay before profitability. The right choice depends on your equity, your risk appetite and how long you can wait for returns.

Becoming a business owner rarely starts with picking a legal structure. It starts with a more fundamental question: should you start from a blank page or buy a business that already works? Both routes lead to entrepreneurship, but they do not commit the same capital, the same risk or the same path to profitability. At Hayot Expertise, we regularly advise founders torn between these two trajectories, and we find the decision is too often made on instinct rather than on a costed comparison.

Starting means registering a brand-new company and building the customer base, the team and the operating tools from zero. You control everything — positioning, brand, organisation, legal structure. In return, you alone bear the commercial uncertainty until turnover materialises.

Buying means acquiring an existing activity, in two legally distinct forms that must never be confused:

• Buying the goodwill (fonds de commerce) — the operating assets: customer base, trade name, lease rights, equipment. In principle, the buyer does not inherit the prior liabilities of the company.
• Buying the shares (parts sociales or actions) of the operating company. The buyer takes over the legal entity as is, with its assets and its liabilities.

This distinction drives the tax cost, the nature of the risk acquired and the financing structure. Our article on the mechanics of a goodwill sale covers the deal from the seller's side; here we reason from the buyer's perspective, at the decision stage.

According to Bpifrance Création, buying is a faster economic process than starting: the buyer immediately has an operational tool, a trained team, commercial partners and an acquired customer base, escaping the "perilous ramp-up" of a start-up. Buying is also seen as safer, because it rests on the activity's track record.

But that advantage has a price. Again per Bpifrance Création, buying costs more, proportionally, than starting, and the required equity is larger. Buying is also more demanding on the human side: you must be operational from day one, with no time to find your feet, and inherit social relations that are often heavier than in a start-up.

This is the comparison grid we use in meetings to make the trade-off objective, criterion by criterion.

The core lesson: buying purchases time and safety, starting purchases freedom and a lower entry ticket. The founder must ask what they lack most — capital, time, or strategic latitude.

This is the tax item specific to buying a goodwill. When the sale deed is registered with the tax authorities, the buyer pays transfer duties on a progressive cumulative scale (State, departmental and municipal shares). In spring 2026, under the French Tax Code (CGI art. 719 and following) and the BOFiP doctrine, the brackets are as follows.

A minimum levy of €25 applies. In practice, for a goodwill bought at €250,000, duties amount to roughly €0 (first bracket) + €5,310 (3% on €177,000) + €2,500 (5% on €50,000), i.e. about €7,810 to budget on top of the price. This cost is nil when starting from scratch — one of the most tangible financial arguments for starting when equity is tight.

Worth knowing: a €500,000 allowance on the duty base applies when the buyer is an employee (full-time permanent contract for at least 2 years) or a family member of the seller, subject to continuing the activity for 5 years. Reduced rates also apply in certain revitalisation zones. These schemes must be checked against your specific situation before signing.

This is often where the trade-off tips. Paradoxically, a purchase is more expensive but easier to finance: the bank has the target's last three years of accounts and an established turnover, which reduces uncertainty. A start-up rests on a forward-looking business plan, inherently riskier in a lender's eyes.

Bpifrance supports acquisitions specifically through its PME-ETI Transmission Plan: dedicated loans, a guarantee sharing risk with the bank, and buyer support. These schemes ease access to credit, but their amounts and guarantee coverage depend on each case — so we present this support without absolute figures and recommend you have it quoted case by case.

When the price exceeds direct financing capacity, setting up an acquisition holding lets a parent company carry the acquisition debt and repay it from the target's dividends. We cover these structures within our holding taxation services.

A typical acquisition financing process:

1. Independent valuation of the target (see our business valuation methods).
2. Accounting, tax and labour due diligence on the target.
3. Building the financing plan (equity, bank loan, Bpifrance loan, possible holding).
4. Negotiating the asset and liability warranty in a share deal.
5. Signing the deed and registering it (paying duties where applicable).

• Micro-entrepreneur regime: starting is almost always the natural route, the micro regime being designed for early stage. Buying a goodwill to run it under the micro regime is possible but loses appeal as turnover nears the VAT exemption thresholds.
• Liberal professions: this involves buying a client portfolio (patient list, book of business) rather than a goodwill; professional conduct rules on introducing the successor prevail. Our support for liberal professions covers these specifics.
• Franchising: buying an existing franchised unit combines goodwill duties and entry into a network (entry fee, royalties). Compare it with opening a new unit under the same brand.
• Employee buyout: the typical case opening the €500,000 allowance mentioned above.

• Confusing asset deals with share deals. Buying shares means inheriting liabilities: a solid asset and liability warranty is essential. Buying the goodwill insulates the buyer from the past but triggers registration duties.
• Underestimating the ancillary costs of buying. Registration duties, due-diligence fees, warranties: budget beyond the headline price.
• Overpaying for the goodwill. A price disconnected from real profitability destroys the advantage of buying. Valuing the goodwill should rest on cross-checked methods, not a single industry rule of thumb.
• Ignoring amortisation. The accounting treatment of an acquired goodwill affects the result: see goodwill amortisation.
• Starting with no safety cash. The ramp-up phase has to be funded: a realistic forecast must cover several months without income.

A founder recently came to us, torn between opening a new retail shop and buying an established business in the same neighbourhood. On paper, the start-up was half as expensive to enter. But modelling both scenarios over 36 months, the existing, already-profitable business generated income from month one and repaid its acquisition loan without cash strain, whereas the start-up only broke even after fourteen months — with a working-capital need that consumed all the equity. Our recommendation reversed his initial instinct.

That is the whole point of the trade-off: it is not decided on the entry price, but on the full cost relative to the time to profitability. A pricier business that is immediately profitable can be less risky than a "cheap" start-up that burns cash for a year. As accountants registered with the French Ordre and statutory auditors, our role is to lay both trajectories side by side, with the numbers, before the decision is made.

Hayot Expertise tip. Before deciding, model both scenarios over 36 months: entry price, any duties, working-capital need, break-even date and repayment capacity. Have any acquisition target audited before signing. And if you lean toward starting, secure cash covering the ramp-up. Our chartered accountancy firm in Paris 8e builds this comparison with you.