Are You Ready for Entrepreneurship?
Entrepreneurship is a dream for many around the world. But, it can be exponentially difficult to get started from the ground up. The potential solution: invest in a pre-existing business, which you can typically find for sale online or by networking with your colleagues.
Starting Up, But Not From Scratch
Buying a current business has lots of benefits. These include:
An established business is already known within your community. Buying a business that’s already established means you have a loyal customer base to get started with.
The business has a history of profit. You will have an opportunity to review the books. If you see profit or the potential for profit, then there is much less guesswork to do.
It might be easier to get a loan. Lenders are more likely to view you more favorably if you have a business that is worth more than you need in capital to upgrade. If you are not sure what your business is worth, you can hire an appraiser. However, if you don’t mind doing a bit of work, you can come up with this number yourself. Tips include looking at other, similar firms in the area, calculating the pre- and post-tax earnings, and adding up current assets. Lenders will scrutinize your personal finances, so ensure your debt-to-income ratio is where it should be if you intend to apply for funds
You can more easily expand. You’ll already have a baseline of products and services, and it will be less difficult to piggyback off of these when you are ready to expand your offerings.
Downsides of Starting Your Own Business
There are also possible challenges to keep in your mind as you evaluate whether or not to start from scratch. these might be:
You may be compared to the previous owners. As Reuters notes, people in smaller communities tend to be highly loyal to their local businesses. As such, you will likely have to live up to the previous owners.
Employees may find it hard to adapt to your processes. Do you plan to come in and change things? If so, you may find resistance from existing employees that are used to doing things one way. Change is difficult, but Dr. Linda Ackerman Anderson asserts via the Being First blog that it can help to explain to them how changes will be beneficial.
If the business has a bad reputation, it may be difficult to repair. Reputations are easily destroyed but not so easily rectified.
Outdated technology may require a significant investment. Upgrading your equipment and systems can be expensive, but it may be necessary to avoid a data breach or to boost productivity.
Things to Consider Before Quitting Your Job
Owning a business is a huge commitment. You are not only committing your time and money, but you must also have the ability to utilize your current business acumen in what might potentially be a completely new environment. You also have to understand that you will likely have less time with your family and that you are the only one responsible for your financial health.
Entrepreneurship is more satisfying than traditional employment. The bright side of entrepreneurship is that it is more fulfilling than working a nine-to-five job. And, while you are the only one responsible for your finances now, this means that only you can set the limits on how much you can make. You can also take time off if you need it without asking anyone’s permission.
Now that you are ready, here are a few quick tips on transitioning into your new role:
Make sure the current owner offers a training period. You don’t want to go into your new business blindly, so talk with the current owner, and ask if they can stay on for a set amount of time to train you.
Establish legally or transfer ownership. Register your business as an appropriate business entity, and also confirm that you have all pertinent licenses so that you can open shop immediately.
Learn how to market. If you’ve never been in a marketing role before, you’ll want to take the time to learn how to market your business both online and in the real world. It’s not always easy, and it can help to hire a part-time or freelance marketing assistant as you get started.
The decision whether to buy a new business or start your own from scratch is a highly personal one. There are both benefits and challenges, and it is up to you to weigh these pros and cons. Whatever your decision, there’ll be lots of work to do. But, providing for your family and establishing your own financial freedom is worth any hassle you may encounter.