Buying is cheaper than building, and nobody believes it

Nobody writes down the cost of a build, because the cost arrives in instalments.

A few subscriptions. A run of evenings you were not otherwise using. No purchase price, no solicitor, no seller to argue with, and no awkward moment where money leaves the account in one lump. On paper it is nearly free, and it stays nearly free right up until the first customer is supposed to appear.

Then the sum changes shape. The thing works and nobody on earth knows it exists. So the evenings stop going into the product and start going into finding people, which is slower, less interesting, and much harder to fake progress at. A year goes by and the build is genuinely good. It has four customers and three of them are friends.

Something in the same category was for sale that whole time. Already trading. Already being found by people who owed the seller nothing. Nobody looked, because building felt cheaper, and it felt cheaper because the cost arrived in instalments that nobody wrote down.

That is the pattern. Not a disaster. A slow and dignified overpayment, made in a currency you do not track.

I used to think the hard part of buying was finding something worth buying. It is not. The hard part is running the comparison honestly, because the comparison is unflattering to the thing you already wanted to do.

The rules

Price your hours or the sum is fiction. Pick a rate you would accept from somebody else for the same work. Not a market rate. Yours. Put it on every hour you expect to spend, including the ones you would have enjoyed spending. A build that eats 400 of your hours is not free, and calling it free is the error that makes building look cheap.

Compare like for like, which means comparing against the version that has customers. People weigh the asking price of a trading business against the cost of building version one. Version one has nobody using it. The honest comparison is against the version of your thing that carries the same revenue as the one you would have bought, and that version sits years out, not months.

Zero is a cost line, not a starting position. No customers. No reviews. No search history, no sending reputation, no support inbox with the answers already written in it, no supplier with any reason to take your call. Every one of those has to be manufactured from nothing. Manufacturing them is the expensive half of the work and it is the half nobody budgets for.

Buying does not remove the work. It moves it. You trade build risk for handover risk, unknown demand for unknown liabilities, and a blank page for somebody else's old decisions. Usually that is a good trade to make. It is never a free one, and anybody selling acquisition to you as the easy path is selling you something.

Most of what you were going to build already exists and is for sale badly. Small sites, small apps, small service businesses, listed by owners who are tired. Not all of them good, not all of them fairly priced. But existing, with the hardest part already done by somebody else on their own time.

Do it now

Take the thing you were about to build and give it one page. One page, two columns.

Left column is the build, and every line on it gets a figure. Hours to a working version. Hours to a version strangers pay for. The hourly rate you just agreed with yourself, applied to both. Tool and hosting costs across two full years. The cost of finding and keeping the first hundred customers. The number of months before any money arrives at all. Guess where you must, and mark every guess with a star so you can see how much of the column is imaginary.

Right column is the buy. Go to two or three marketplaces where small sites, apps and businesses change hands. Find three things listed right now that do roughly what your thing would do. Write down the asking price, the stated revenue, the stated age, and one line on what looks wrong with each. Something looks wrong with all three of them, which is normal.

Total the build column, set it against the listing closest to your idea, and write one sentence underneath saying which came out cheaper and by how much.

Then write the one sentence you would rather skip entirely. State plainly what building gives you that buying does not, in your case, in one sentence. Sometimes there is a real answer and you should write it down. Nothing worth owning is for sale in your category. You need the code to be yours for a reason you can state. If you cannot find a real answer, that is the finding.

A worked example

Say you run operations for somebody else's company, with savings put by. Your evening plan is an online shop for printed school name labels. Then a ten-year-old shop selling exactly that comes up for sale.

The shop, the listings and every figure are invented. None of it says what a real shop costs or is worth.

BUILD                              * marks a guess
Hours to a working shop            200 *
Hours more until strangers pay     400 *
Own rate, on all 600 hours         £35 an hour, so £21,000
Tools and hosting, two years       £2,400 *
First hundred customers            £6,000 *
Months before any money            10 *
BUY                       asking    revenue a year   what looks wrong
Label shop, 10 years      £30,000   £55,000          one printer, no contract
Bag-tag shop, 4 years     £12,000   £9,000           sales falling two years
Stationery shop, 6 years  £40,000   £38,000          all sales on one marketplace
Totals: build £29,400 and ten months. Label shop £30,000.
Cheaper: the build, by £600. A hundred customers against ten years of them.
Building gives: a shop laid out exactly as wanted. A preference, not a reason.

Notice what the build column never prices. Reviews, search history, parents who come back every summer.

The failure you will hit

You will price your own hours at zero, or near it, because they feel already paid for. They are not. You have a fixed number of them and spending them here means not spending them anywhere else. The quieter one is harder to admit to. You will do the sum, find that buying wins, and build anyway, because building is the thing you know how to start on a Tuesday evening with nobody's permission. Notice that, because preferring to build is allowed. Calling a preference a calculation is not allowed anywhere near this sum.

Not for you if

You have no money and no route to any, in which case building is your only move and this sum will only irritate you. Come back when you can write a cheque, even a small and frightening one.

Step two is about which businesses are worth that sum in the first place. Step one of every track is open to anybody, and the rest sits inside Membership. The price is on the page.