How To Turn The Disadvantages Of A Startup Into Entrepreneurial Success

We all want to start the next Apple, right? Anyone with entrepreneurial dreams envisions the startup in the garage that grows to epic success – but where these daydreams fail is where they break with reality.

 

Startups are really, really tough. You are fighting against highly stacked odds, jumping into a market with an unproven concept that will take far more money to get to the black than you think. You won’t have a customer base, you will be starting from ground zero with an unproven marketing plan, you will have to vet and train a brand new staff and you will be doing all of this without any cash flow.

 

You can, however, approach business ownership in a slightly different way, while still meeting your goals for entrepreneurship. How? Buy an existing business.

 

 

Why? Existing businesses can take some of the disadvantages of a startup off the table. Here’s how:

 

Existing businesses come with a customer base.

When you buy a functioning business you get the clientele as well. Contracts with customers, the regulars at the bar – they typically come with the deal. The best way to keep those customers is to avoid making any changes until you understand why those customers are there. Rate hikes on contracts and getting rid of karaoke night might seem like good ideas on paper – but they will push out the all-important customer base you inherited.

 

Existing businesses typically come with a marketing plan and name recognition.

One of the major challenges of starting a new business is getting the word out about who you are and what you do. An already existing business has jumped that hurdle – your job now is to push for more growth by constantly developing and improving your marketing plan.

 

Existing businesses have a staff in place.

A brand new business can be extraordinarily tough because there isn’t a veteran staff to show everyone the ropes. With an existing business a fully-trained staff is already in place. A caveat here – just like the advice for your customer base, major staffing changes right out of the gate will likely hurt more than they help. Take some time to understand what everyone does and how their presence helps the business before cleaning house.

 

Existing businesses have cash flow.

It can take months before a startup gets to a point where the cash flow is enough to cover expenses. An existing business exists because this need for cash flow has already been met. Be careful, however, not to overextend your expenses with too many changes or improvements before you fully understand where that cash flow is coming from.

 

The message here is while your garage-business daydream might be fun, an existing business can get you there without having to contend with the pitfalls of startup-hood.

 

Have you always wanted to own your own business but didn’t know you could buy one? Do you have questions about the differences in risk between startups and existing businesses? Ask us! Leave any questions or comments and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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3 Reasons Why Buying A Business Is Better Than Starting One

What’s the best path to entrepreneurship?

 

Most think of the startup in some suburban garage – but is that really the smart way to go? The short answer? Probably not. Buying an existing business, however, is typically the better route to business ownership. Here’s why:

 

1. Starting a business is a risky and expensive venture.

 

Startup businesses are tricky. You are testing new waters – with your concept, with your location, with your operating procedures, with a brand-new staff. In the unlikely event that all goes as planned and everything works in your favor, you will still need an enormous amount of capital to lease a new location, renovate that location to suit your needs, equip your location, buy inventory, pay for permitting and licensing – the list goes on. Then you will also need to have enough capital to sustain your business, your staff and yourself for the time frame it takes to start turning a profit, which can be several months or more.

 

If you buy an existing business, many of the risks and financial challenges of a startup have been removed. With an existing business, you are buying a proven concept, location, operating procedures, a trained staff – and in most cases a training period with the existing owner to get you on your feet. The amount of capital you need might seem substantial, but remember that it would be far more expensive in the long run to find, furnish, equip, stock and run a business with no history of success than to just buy one with that laundry list already complete.

 

2. There’s no such thing as a “startup business broker”.

 

One of the best parts of buying an existing business, especially if this is your first foray into business ownership, is you can have expert help along the way. By having an experienced and qualified business broker by your side you have expert advice to guide you through your business search and help you find a business that fits with both your goals and available capital.

 

Don’t see any businesses on the market that appeal to your entrepreneurial dream? Sometimes buyers have a specific type of business in mind, but the goals they have for business ownership would require that they end up in an entirely different industry. A conversation with a good broker will help you decide if the business you think you want to have is really the business you should have to get the kind of life you are looking for. If you are starting a business, you can seek advice from anywhere and everywhere, but there won’t be anyone to guide you in the same way a broker can if you buy.

 

3. A business you buy comes with everything you need.

 

Like we discussed before, starting a business means having to hire and train a brand-new staff, finding then leasing a new location, buying all the equipment and furniture, finding and purchasing inventory, and setting up licenses and permits – if you can even get them. An existing business comes with everything, including in most cases the former owner for a while (for a training period to help you learn the ropes). This will take an enormous amount of pressure off of you as a new business owner, allowing you to focus on learning your new business without all of the additional headaches that a brand new business would require.

 

If your goals for the future include business ownership, seriously consider buying an existing business instead of starting from scratch.

 

Have more questions about the differences between buying an existing business and starting one from scratch? Are you curious about what types of businesses could be right for you? Ask us! Please feel free to leave us a comment or question here and we would be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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Why You Don’t Need A Degree In Small Business Ownership

 

How much education do you need to own your own business?

 

 

Ask a college recruiter that question and you’ll likely end up with a MBA degree. Ask a successful business owner and they’ll tell you that nothing trumps practical experience and hard work. So who’s right?

 

The entrepreneur. Some of the most successful business owners out there, like Richard Branson of the Virgin Group, don’t have a formal education. They had a vision that they fought for and built into a success.

 

Our society places a high value on higher education – as it probably should – but this has another, perhaps unintended consequence of convincing everyone that without a degree you can’t be successful. That’s just not true, especially in the small business world. You definitely don’t need a degree to own a business.

 

Small business ownership does require a few things. Grit and determination. Passion. The ability to hustle and never give up. The insight to see failures as lessons that can be learned from.

 

None of these things require a college degree because entrepreneurship is a mindset – not a major.

 

Should business schools even exist? Sure, but attending and graduation from a business program is not a prerequisite for business ownership.

 

You know what else isn’t required to be an entrepreneur? Starting from scratch. You don’t need a garage and a brilliant idea, you just need a little capital and the desire to own your own business. There are always existing businesses on the market, from a litany of industries. Industries where you have practical experience that you can translate into business ownership success. Buying an existing business also removes a lot of the guesswork. You know that the idea, the location, the operating procedures, the products and services – they all work because the business is open and turning good numbers.

 

If you are apprehensive about buying or starting a business because you feel like you are unqualified – don’t. Talk to a business broker today about your goals for business ownership, about what industries might fit those goals and what businesses are currently on the market. You might be pleasantly surprised that your years of practical experience can turn you into a business owner today.

 

Have you always wanted to own your own business but don’t think you’re qualified? Would you like to know what industries would fit with your career goals? Please leave any questions or comments here and we would be happy to help.

 

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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Veteran? Why Small Business Ownership Is For You

Veterans make great business owners.

 

Your military career trained you for leadership, taught you discipline and gave you the mental endurance to put in the hours it takes to get something done. Guess what? Those are the skills and qualities great entrepreneurs need.

 

 

I’ve never owned a business before. I wouldn’t know where to begin.

 

We’ve got good news – you don’t have to start from scratch. There are a myriad of small businesses for sale, and there’s a good chance that you will be able to find one that fits your goals and one in an industry where you have some practical experience. Buying a business means you don’t have to start from the ground up. You get a fully operating business, complete with employees, equipment, inventory, operating procedures, vendor contracts – you get the idea. You can walk in on day one and be the owner of a business instead of starting with nothing more than an empty space.

 

Am I qualified to own a business?

 

Yes, absolutely! Many of the training programs and careers within the military transfer very well as the experience and practical knowledge needed for many industry sectors in the small business community. The type of business and industry sector that will be right for you will depend a lot on what jobs you did both before and during your time in the service as well as what you hope to get out of business ownership. Love working on cars in your spare time and spent your military career as an aircraft mechanic? Maybe an auto shop is for you. Looking to spend as much time as possible with your family? A bar or restaurant that will need your attention 7 days a week probably isn’t the best choice. Talk to a business broker about your goals and your experience – you might be surprised by the businesses that would meet both.

 

 

I don’t have a lot of money, how much money does it take to buy a business?

 

It depends. There are very small businesses that won’t cost much and larger businesses that run in the millions. The good news is that as a veteran you have special access to programs from the U.S. Small Business Administration (SBA) that can help you get the funding you need to buy a business (click here to learn more!). Talk to your business broker about what SBA programs you might qualify for and what businesses might qualify for SBA lending. If SBA financing is out of the question, many sellers will offer seller financing to the right buyer with a decent down payment.

 

Although it might seem like a daunting idea, small business ownership is very possible for veterans. Talk to a business broker today to explore your options and get you started on the path to entrepreneurship!

 

Are you a veteran and have questions about what SBA programs you would qualify for? Would you like to know what types of businesses would suit your goals and experience? Ask us! Please leave questions or comments here and we would be happy to help. Thank you for your service!

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

www.InfinityBusinessBrokers.com

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To Buy Or To Build: The Future Franchisee Question

 

If a franchise is something you have considered, you may wonder if it makes more sense to buy an existing franchise location or just start a new franchise location yourself. Here are some things to consider: 

 

What are the major expenses involved in starting a franchise?

 

The first cost you will incur will likely be the franchise fee. Franchise companies charge this upfront fee as a way of recouping the costs of training, branding, and the support they will provide. The average franchise fee is somewhere in the neighborhood of $30,000, but they can range from less than $10,000 to over $100,000. The franchise fee will depend on the size of the franchise you are buying into, and each individual franchise will have specific requirements to become part of the brand.

 

There may also be costs related to setting up a location. You may have rent payments and may have to pay for things like landscaping. You may need to have signs made, install new equipment and fixtures, buy new furnishings, and build-out a space.

 

Any new business will also need to bring in an initial inventory and purchase supplies. There may also be operational costs like advertising and payroll, so you will need to be certain that after all the initial expenses are covered, there is still enough capital left to cover your additional expenses until you are able to turn a profit.

 

How can you be sure that you have enough to get your franchise up and running and keep it running until a profit starts coming in? Ask questions, lots of questions, during the buying process. You will need to have at least a general idea of how much time per week you will need to work, and how much income you can expect to bring in if all goes well.

 

What about buying an existing franchise location?

 

Buying an existing franchise location can be a great option for those who are looking to own their own business but don’t want to risk the massive amount of capital it takes to start a new location (without knowing if that location will be successful).

 

You will still need to meet the qualifications required of the particular franchise you are looking to buy, and there will be fees associated with becoming a franchisee. These fees and requirements will vary, so ask you business broker for the range of fees associated with a specific franchise. The benefit of buying an existing location is you will remove the additional costs of a build-out, initial inventory and permitting fees. You will also remove a good deal of the risk associated with starting a new franchise in an unproven location, as an existing location has the numbers to prove it has been successful.

 

Which path is right for you? It depends on the amount of capital you have available and the level of risk you are willing to incur. Talk to your business broker about you options and they will be able to help guide you on the best path for you.

 

Does buying a franchise seem like the right path for you, but you have additional questions? Leave a question or comment here and we will be happy to help.

 

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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Buying a Business: What Future Entrepreneurs Need to Know

 

When the title entrepreneur comes to mind, it often conjures thoughts of a person who came up with an inspired idea and built a successful and thriving business from the ground up. While this may be the path for a few very driven individuals, the path for most entrepreneurs begins quite differently – with the purchase of an existing business. This can be a fantastic entre into business ownership because it skips all the disadvantages a start-up will encounter, like establishing a customer base and building cash flow.

 

Why You Should Skip the Build-Out and Buy Existing

 

Typically, buying a business is a safer bet than building one from scratch. You get to take over as owner of an already built-out location with trained employees and a proven set of operating procedures.

 

It is not, however, a fool-proof way to enter the world of business ownership. You need to choose a business that is profitable, or one that has easily-remedied issues that will make it profitable quickly (like customer service issues that could be handled by replacing some of the staff). You need to choose a business that has room for growth, and if it is a retail business, one with inventory that customers still want.

 

A Few More Pointers For Business Buyers

 

When you have made the decision to buy a business your next step is choosing the type of business you will buy. Be very careful with this step because it is where many new entrepreneurs make a huge mistake.

 

This mistake is buying a business you know absolutely nothing about. If you are someone who has enjoyed the bar-scene for a long time, but you have never spent so much as a minute working in the bar/restaurant industry, then buying a bar is a terrible idea.

 

Look in industries where you have some knowledge or experience, as this familiarity will save you from complete disaster. Taking over a business for the first time is hard enough; you don’t want to add starting from scratch in a brand new industry to the equation.

 

The smartest step any budding entrepreneur can make, or anyone looking to buy a business for that matter, is to hire an experienced business broker. A broker will be a great asset, as they can help you find businesses that are right for you, be a buffer during the negotiations between you and the seller, and they will be invaluable with assisting you with everything from licenses to red tape.

 

Once you have a broker and an idea of what type of business you are looking for, you will be well on your way to finding a great existing business.

 

Do you have a business type in mind, and are looking for help with finding the right business for you? Please feel free to leave us a comment or question here, and we will be happy to help you on your journey to business ownership.

 

 

 

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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Is It Better to Buy or Start a Business? Why Buying is Better

Is it really better to buy an existing business? Can’t I just start one?

 

 

The short answer is yes, it is far better to buy an existing business. In this article we will examine a few reasons why it is far easier as a budding entrepreneur to buy a business than to start one from scratch. 

 

The first reason? An existing business has a history that you can examine.

 

If you start a business from the ground up, there is no way to know what the track record will be. If you are fortunate, the record will be good. If you aren’t, you probably won’t be around long. An existing business removes a bit of this risk by having financial records that you can examine closely prior to purchasing the business. An existing business also has a proven location and comes with an already established customer base.

 

Another plus to getting a business with records? As you go through the numbers you may find new business growth ideas, unused niches, or overlooked areas that could be streamlined.

 

The second reason? An existing business has cash flow.

 

New businesses fail when new business owners don’t take into account the period of time, typically 12 to 18 months, between opening the doors and when the business will actually start generating a profit. Many new businesses go under because they have no cash left after getting to the grand opening, and they end up running on fumes and having to shut the doors before anyone even knows the business is there.

 

An existing business is already generating income, and even if you will need to find financing for operating expenses, there is no need to guess how much money you will need and how much you will be able to pay back because you already know what income the business generates.

 

The next reason? An existing business comes with someone to show you the ropes.

 

When an existing business is sold, there is usually a training and/or consulting period written into the contract, ensuring that the new owner gets the proper training to keep the business up and running.

 

If you start your own business, you will be going it alone, and although there might be business owners who are willing to give you advice, you won’t have someone to show you exactly what works, and more importantly what doesn’t work, for those critical first few weeks of ownership.

 

The last reason? It is far easier to get financing for an existing business.

 

It is fairly common in the sale of small businesses that the owner will offer seller financing. This is great for a new entrepreneur for two reasons.

 

First, it says a lot about a business that the current owner has enough confidence in the business model to take payments over time. By offering seller financing, they will be dependent on the continued success of the business for years to come.

 

Second, in the wake of the 2008 economic climate traditional sources of financing can be very hard to come by. For a buyer who can’t pay all cash up front, seller financing allows for the purchase of a business with just a sizable down payment.

 

For all the reasons above and more, deciding to buy an existing business will likely put you in a profitable position much sooner and with less risk than creating a business from scratch.

 

Have you ever started a business and wished that you had just bought one that was already established? Do you have questions about the success rates of existing businesses once they change ownership compared with the success rates of start-ups? Leave us a comment or question here and we will be happy to help.

 

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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Spend Money To Make Money? Big Mistakes New Business Owners Make

The old adage you have to spend money to make money is absolutely true. Business owners have to invest in things like marketing and improvements in order to keep a business thriving and growing.

 

There is a far more important adage, however, that a new business owner needs to abide by. That adage? If it isn’t broken, don’t fix it.

 

 

What do we mean by that?

 

When you envisioned your life as a business owner, you likely saw your business as something uniquely your own. Your own designs, ideas, concepts.

 

If you’ve decided to take the entrepreneurial plunge by buying an existing business, you have made a very smart choice because you don’t have to start from the ground up – you get a fully operational business with a proven location on day one. This removes the issues a start-up business would bring – like finding a location, build-outs, buying equipment and furnishings, getting permits, hiring a staff, creating operating procedures, painting, designing a sign – the list is enormous.

 

Getting your hands on an existing business means that while all of that initial work is finished, all of those initial decisions have been made by someone else – the previous owner. This can cause a business buyer to have issues with the aesthetic and/or operational aspects of their new business because it doesn’t exactly match the business they envisioned.

 

As a new business owner, you need to consider this part of buying a business. There will be some things that you don’t like about your new business and some things that you personally would have done differently.

 

Maybe you hate the paint colors. Maybe you think the ordering system is wildly archaic. Maybe you think the layout needs to be completely changed.

 

If you are having these thoughts about your new business – STOP. You bought an existing, operating business. Every business is unique and is inherently very complicated, so it would be very difficult to ascertain what parts of the business work and what parts don’t on day one.

 

You might hate the paint colors, but maybe the rustic charm of the decor is what keeps the regulars coming back. You might not like the ordering system, but it is based on the vendors your business needs to survive. You might hate the layout, but it is the layout that creates the efficiency that keeps the business alive.

 

New business owners who are hung up on their own vision of what their business should be walk in on day one and immediately embark on a very expensive major renovation, rewrite the operating procedures and change all of the vendors and staff without taking the time to figure out why the business is successful. This always ends in complete disaster.

 

We aren’t saying you can’t change things. What we are saying is patience is the name of the game. Give yourself a few months to decide what works and what doesn’t, why the previous owner did things the way they did. Once you really understand the business as a whole, you can make small changes to slowly guide the business toward your vision. Don’t fix what isn’t broken!

 

Are you thinking about buying a business, but haven’t seen anything that matches the vision you have for business ownership? Would you like to know more about how buying a business can be a better choice than starting from scratch? Please leave us any comments or questions and we would be happy to help.

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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Should You Start-Up Or Buy A Business?

Whether you are looking at working for yourself or investing in a new and exciting business venture, all of the potential choices can make it confusing.

 

 

Should you start-up or buy a business?

 

Although start-ups may be exciting and relatively inexpensive at first, there are a lot of unknown factors and launching a new business takes incredible effort and time to build momentum.

 

With an existing business, someone else has already done much of the work required to make them successful and you know there is a marketplace for the product or service.

 

POINTS TO CONSIDER:

Customers – Although you will work to expand the client base, there are already tried and true customers that like the business and keep coming back. Start-ups have to go out and find their customers from the beginning one at a time over a period of years.

 

Suppliers – Existing businesses have working relationships with reputable vendors that provide them with quality products and services. Many start-ups have to search out and form relationships with new vendors.

 

Risk – With an established business, a lot of the risk has been reduced from the enterprise. It already exists and has proven itself successful. Start-ups may appear to be cheaper, but their success is unproven and the total cost in time and money can be very significant.

 

Cash Flow – An existing business is at a point where the owner can probably take a salary, cover debts, and reinvest in the business. A start-up is just that… starting up. Most start-up owners struggle greatly for the first two or three years while trying to establish their business.

 

Staff – The greatest benefit of buying an existing business can be the experienced staff that comes with it. These are trained individuals that have helped to make the company a success and can run it in your absence. With start-ups, you are the only staff. If you get sick, so does the business.

 

Your Focus – With an existing business, you can immediately focus on the running and improvement of the business. With a start-up, you spend more time focusing on starting up the business and requiring all the necessary elements to make it functional.

 

The Brand – You are buying the brand name of the company and all of its established clientele, goodwill and community connections. This is a great foundation for attracting new business or making “cold” sales calls.

 

Proven Business –  A financial track record is something that you can take to the bank to secure financing. Start-ups lack this which makes acquiring working capital difficult.

 

In summary, acquiring an existing business can significantly increase your odds of being a successful and satisfied business owner.

 

Do you have more questions about the differences in risk between an existing business and a start-up? Would you like to know the typical cost differences between the two? Please leave questions or comments here and we would be happy to help.

 

 

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.infinitybusinessbrokers.com

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Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com

12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907




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