Figure out if your old sofa still covers your basic needs and wants. For example, if the sofa is too small, you should probably buy a new one since reupholstering won't change the size. However, if you just don't like the color, reupholstering might be a better option.
Inspect your sofa carefully. Even if there are no problems with the size and style of the sofa, it might be too worn out to justify spending money on reupholstering it. Sit on the sofa. Pay attention to how far it sinks in. Flip it over and inspect the bottom for damage from age and wear. A worn-out sofa should probably be replaced over reupholstered.
Visit both reupholstering shops and new furniture stores to get an idea of the selection. You might find a new sofa you love and decide to buy new or you might find a fabric that would be perfect to reupholster your old sofa.
Pay attention to the prices of reupholstering your old sofa and the prices of new sofas that you would consider purchasing. The range for both is broad and depends on the style, size and fabric you're looking for. If it turns out buying a new sofa is about the same price as reupholstering your old sofa, you might opt to go for new.