Every day, ambitious entrepreneurs seek help when looking to buy their own business to build an investment for themselves, their families and their future. While the opportunity may seem daunting to some, others enjoy the freedom, control and excitement of starting an empire of their own. However, what some entrepreneurs underestimate is that with complete control comes significant responsibility.
Buying a business is a large undertaking that requires thorough planning, execution, time and money. Here is some insight on some of the most important things to consider before buying your own business.
- Why do you want to buy a business? More specifically, what are you trying to accomplish? Some entrepreneurs seek freedom and flexibility from their regulated corporate lives, some are passionate about certain industries and others are motivated by the opportunity to provide a stable foundation for their families. If you are one of these types of entrepreneurs, or a combination of all three, it is important to realize your motivation, as it will be a key factor in business decisions moving forward.
- Once you are completely committed to becoming a business owner, it is time to figure out how to start by making sure you understand the basic similarities and differences between starting your own business and buying an existing business or franchising.
- Starting a business from scratch can be a difficult endeavor that requires a lot of time, money, patience and motivation. It allows for complete control over business decisions and daily operations. You make your own business hours, hand pick your staff and control essentially every aspect of the business. However, you could struggle in the beginning as you figure out the best way to run daily operations. While there is more freedom, there is also potentially more risk.
- The main difference between franchising and buying an existing business is the level of control you will have. Franchising provides guidance. In a franchise, the franchisor, or the business owner, sells the rights to their business’s logo, name and model to an independent franchisee. Franchises are most common in businesses that are considered to be “chains” such as restaurants and hotels. When you buy a franchise, you get the right to use the name, logo and products of the larger brand. In comparison, buying an existing business gives you more control but less guidance by taking on full ownership of the business.
- Do your due diligence. When buying a business, perhaps one of the most important factors is making sure that you understand everything that goes into daily maintenance. Some factors to consider include financial information, real estate, licenses and permits, and environmental issues.
By considering these factors, you are on your way to establishing the foundation for becoming a well-rounded business owner, as well as setting up your financial future. While taking on a business of your own may seem daunting, it is important to remember that sometimes the most challenging experiences are often the most rewarding. QCBN
By David Dinerman