Thoughts on hiring experienced workers ($$$), or newbies ($) for a new/small business

Sometimes experienced people come with bad habits. And those can be almost impossible to break sometimes.

New people are fresh and like a sponge, you can mold them they way you want.

I think a third option would be someone who has industry knowledge but not really experience being put in a position to be in charge, but knows he/she can do it. Someone who is looking to step up. I think that is where you'll find the best candidate.