We all know the stories of the truly great entrepreneurs who started with nothing and built a business empire from the ground up. Does this really happen? Sure, we know it does, but this scenario is hardly the norm. Depending on where you find your statistics, a very large percentage (sometimes 75% or more) of startup businesses fail before their 5th year.

Why does this happen? The business world is tough, and startups are expensive. Any brand new business is gambling on an unproven product, an unproven business model, unproven operating methods and an unproven location. Many budding entrepreneurs simply see starting a business as finding a space and letting the rest fall into place. What they fail to see is balancing the enormous expense of opening a new location (lease costs, build-outs, equipment, furnishings, inventory purchasing, permitting, licensing, etc.) and then saving enough capital to make it the six-month average that it takes a new (and successful) business to start turning a profit.

Should the scary world of startups keep you from becoming a business owner? Absolutely not!

One of the best ways to enter the world of entrepreneurship is to buy a business that has already passed the startup test. If the doors are still open and better yet if the business is a success, then the initial hurdles have already been jumped for you.

What if the reason I want to own my own business is because I want to create something that is uniquely mine? You can accomplish this easily by buying an existing business. Here’s how:

Let’s say you have a really great restaurant concept. Instead of building an entire restaurant infrastructure from scratch, you can buy an already proven location that is fully equipped, furnished, licensed, staffed and stocked. When you take over the restaurant (and after you are careful about decisions on changes, see The Over-Confident Buyer: Why You Should Take Baby Steps With Your New Business) you can begin to implement your own concept over time. You will save yourself the money and the headaches of starting from scratch.

If you still are not convinced that buying an existing business is for you, talk with an experienced and qualified business broker about the difference in expense for a startup versus an existing business in the industry you are considering. A broker will also be able to talk to you about the difficulties of obtaining a location, the necessary permits and licenses, etc.

If business ownership is something you would like to see in your future, then an existing business can be a great option. Want to see what’s currently out there? Try our search page to see what kinds of businesses are available and then talk to us about the businesses that interest you.

Are you still not sold on the idea of buying an existing business? Do you have questions about how the two options for business ownership compare? Ask us! Please feel free to leave a comment or question here, and we will be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

You have decided to buy a business, that’s great news. Now you are trying to decide if the business you buy will be from a private owner or part of a franchise. Which type of business would be right for you? Let’s look at both sides.

To Franchise

If you buy an already existing franchise location, you inherit all of the benefits of a franchise without many of the downsides. You get a built-out location, the brand, an already trained staff and tried-and-true operating procedures. You typically won’t pay the same franchise fees that the original owner of the location did, instead you will pay a transfer fee.

Although the franchise fees may seem expensive, you need to remember that what you are buying with those fees is a brand and structure that you won’t have to come up with on your own. If you buy into a larger franchise, then you may not need as much focus on marketing as you would in a privately held business as customers with brand loyalty will seek you out.

Not To Franchise

If you want your business to go in it’s own direction, then a franchise is definitely not for you. You will not be able to change the name, the menu, etc. as you see fit.

If you want to start with a new franchise location, you will face the same issues any start-up would with the additional cost of buying into the franchise with franchise fees. You will need to pay for the location and the build-out, which will need to follow the guidelines of the franchise. You will have to train your own staff, and while you might be able to borrow some training help from the franchise itself, the staffing responsibilities will be all up to you.

If you do deviate from the franchise agreement, you risk having your franchise license suspended, which is not an issue you would ever have to contend with as a private business owner.

What To Do?

As with any business decision, there are risks that cannot be avoided. Owning a franchise can be a very profitable endeavor, but you will have to play by the franchise rules. The best thing to do if this a decision you are considering is talk to an experienced and qualified business broker about the good and bad of franchise ownership. They will be better able to guide you than the brokers and representatives of the franchise you are considering who are hardly objective in this situation.

Are you considering becoming a franchisee? Do you have questions about the process? Do you have questions about the good and the bad of franchise ownership? Ask us! Please feel free to leave us a comment or question here, and we will be happy to help you with buying a franchise.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

Are you tired of working for someone else? Are ready to take the entrepreneurial plunge?

Here are your first considerations when starting out on your own:

Should I buy or start a business?

Starting a business can be very tough, and a large percentage of start-up businesses don’t make it more than a few years. If this is your first foray into business ownership, it is usually a much better idea to purchase an existing business.

Why? In an existing business the business concept has proven itself to be effective because the business is still open. You will have the previous owner to show your the ropes when you first take over, and the physical space is already built out and functional. Systems of operation are already in place, all you have to do is learn how the business runs.

What kind of business is right for me?

This is where we always use the classic bar example. If you have always wanted to own your own bar, but have never worked in any aspect of the restaurant industry – then buying a bar will probably be a huge mistake. You need to choose a business where you already have some experience and expertise. Jumping into business ownership is difficult enough, you don’t want to add trying to learn an entirely new industry to the mix.

Think about work or education experiences you’ve had in your life that you enjoyed, or jobs you were very good at and try to find businesses that are in the same categories. Talk with your business broker about what industries you are considering, and they can help you narrow down your search.

How do I find a business for sale?

The best way to find businesses that might be right for you is to use the services of an experienced and knowledgeable business broker. They will know what is on the market, and will be able to find you businesses that fit your experience and budget.

Another way to scout potential businesses is to use an online business search like this one.

I found a business I want to buy, now what?

Tell your business broker that you have found a business that you are considering. They will contact the listing broker to get a non-disclosure agreement for you to sign. Once you have signed the non-disclosure, you will get to take a look at the business and some financial records to see if you would like to make an offer.

If you like what you see, you can make an offer. Once an offer gets accepted, you will enter a phase called due diligence where you will get a chance to look at everything – all financial records, contracts, etc. If you still want to buy the business, then negotiations will proceed based on what you found during due diligence. If you decide not to buy the business after due diligence, you don’t have to.

Buying a business is a big step. Make sure you choose a business that will be right for you. You also need to get help from a qualified business broker to make your transition to business ownership a positive one.

Are you thinking about buying a business, but you aren’t sure what kind of business would be right for you? Do you have more questions about the business buying process? Ask us! Please feel free to leave us a question or comment here and we will be happy to help you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com