New entity or customize the existing entity?

As part of implementing Dynamics CRM, I need an entity which has some fields from the Account entity and some new and business-specific fields. What is the best approach -

1. Creating a new entity from scratch?
2. Renaming the account entity and then use existing and add new fields to it?
3. Any better approach than either of these?

I am a beginner in Dynamics CRM so any pointer to a similar example will be a great help.

I would always look to re-using the Account entity (and contact entity) as they have built in relationships with a lot of system entities. Wherever you see a 'customer' field, this is referencing the account/contact entities, so to go a custom route means foregoing a lot of built-in functionality.

Also, the integration with Outlook has functionality specific to account, so again if you went with a custom approach you would be losing this functionality.

Depending on your requirements, if the entity you need can be considered an account or organisation of some description, I would tailor the account entity to my needs by extending it. Even in the most custom-development projects I've worked on, where none of the out of the box modules are being used, the 2 entities always used are account and contact, so I would recommend using them.