“I own my own business.” This phrase has a great ring to it, and if you’ve ever thought about owning your own business you will have a few options.
Option one? Come up with a concept and a location and start from scratch.
The plus side to this option? The business is 100% yours from day one. Every paint color, piece of furniture, operating procedure, etc. will be something you created or decided on.
The downsides to starting this way? Everything is yours, but everything is also unproven.
Your location might be perfect, but it also might not work at all for your type of business. The only way to figure out if a location is going to work is to put a business there and see what happens. Your operating procedures, the inventory you chose – everything has not yet stood the test of time and the test of the market, so in reality you are essentially going in blind.
The other major downside? The money.
Buying a business may seem like an expensive venture, but believe us when we say that starting a business can be far more expensive, especially with the added risk of an unproven model. A brand new business needs a location – then that location needs a build out complete with the permitting and licensing to do so and also new equipment, furnishings, flooring, paint, décor, lighting…the list goes on. Then you will need to stock the place with supplies, inventory, etc. You will then need the working capital to keep the place open and running a minimum of six months – which is typically the time needed for a new business to start turning a profit. Sounds expensive, right? It is.
Option two? Buy an existing business and then make it your own.
If you buy an existing location – the location, the product or service, the operating procedures – they all work, otherwise the business wouldn’t be open.
You will be paying for the already existing, built-out and stocked location, but this price will be far less than if you did it all on your own.
Would you invest your money in an unproven business, or would you invest in a company who’s proven their staying power? Think about entrepreneurship in the same way. It is a far better bet to buy a business that already works instead of starting from the ground and building up.
Are you thinking about buying or starting a business? Do you want to know what the numbers really look like when you compare the costs of the two options? Ask us! Leave us a comment or question here, and we will be happy to help you on your journey to entrepreneurship.