So you Want to Go Into Business for yourself
Owning your own business is a dream that many people have, but only a few will put in motion. For those that want to capture the dream, there are paths that can be followed which will make these dreams come to pass. How to get from an idea of ownership to the actual running of your own company is detailed in this article.
Deciding the type of business you want to own
This decision is complex and sets in motion for many the success or failure of the business. What type of business do you want to own? Do you have the money to start or buy such a business? If you do not have the total amount needed, can you get it from some source? Do you have personal experience in the business you would like to own? Is your work life likely to help you in your business venture? Can you survive the first year of operation while you get the business on a solid footing? Are you going to need to take money out of the business in order to live?
All of these factors go into the decision of the type of business you would like to own. Knowledge of the business type and the money you have available are two of the first things a potential owner needs to look at to become an owner. Are you are going to buy an existing business or start one from scratch is another element that must be studied. There is usually a difference in cost between buying an existing business and starting one up from the ground up. The reason for this price difference is the cash flow the existing business is pulling in currently. Another item to be considered is to buy a franchise or not. Is your knowledge of the business from work experience or does it come from a hobby or a small sideline business.
The decision as to type will be controlled by funds
The amount of money available will control the decision for the type of business you end up owning. This is the time and place for a reality check between what is possible and what is your dream business. Most owners of a business come to this point in the decision-making early in the process. Of course if you have unlimited funds then almost anything is possible. The real world scenario is the money available will dictate in most cases what you can do or attempt to do. Careful planning and honesty to your self is critical at this point. If you are going to have to live off the business in the first year, you better plan for that necessity.
How much capital after purchase is it going to take to run the business without huge incoming sales? Once these factors are faced and decided upon the work of finding a business for sale or starting one from scratch is in play.
The use of a Business Broker
At this point it may be wise to speak with several business brokers and see what they can suggest or advise you to look at. They have a good idea of what the markets are like and they will be a great source of current information. They will know about franchises and independent businesses that are for sale. They will be able to give you very good ballparks on the money needed to buy the business type you want or what it would take to start one. Take advantage of this excellent source
Owner financing of a business
Many businesses are sold each year with the help of the current owner. They are willing to carry back some of the purchase price if the buyer cannot come up with all of the money needed to make the purchase. When this is part of the deal, the sale price is usually increased to sweeten the deal for the seller. It is an inducement for the seller to make the deal. If the terms are fair and the business can carry the extra payments then a deal may be struck. This negotiation is tricky and must be fair to both parties. If the deal is unfair to the buyer, the best course of action, if better terms cannot be arranged, is to walk away from the sale. Poor terms and an unfair financial burden can result in a failure of the business or a forced sale. This is a no win situation in the long run for both parties. If you cannot get help from this source, then you can try business lenders, but they do not have the incentive that a seller has to loan you the money. If you can get a lender interested you may be able to make a better deal for an all cash buyout.
Conclusions
Making a dream of owning your own business happens can be done if you are realistic and have some money. You need both to pull it off. Remember that owning the business is not a guarantee that you will be free from a boss or worry.
Business ownership brings its own set of worries and problems. You are the decision maker and you must face up to making the choices. There is no one else to do this job. The customers in a sense become your bosses, as you will depend on them to stay in business. Getting them to deal with you and spend money is the art of owning a business. There are many sources you can read on how to make this happen. Some of them offer very good ideas that you can put into play immediately. When you were thinking about the type of business you want, this should have been part of your decisions making. You have to know as much as you can before you own a business in order to have a chance at success. Some luck is involved, but hard work will usually be the difference in a business.
Bill Henthorn formerly was principal broker and owner of a resort / commercial real estate brokerage in Honolulu which specialized in representing sellers in transactions up to $50MM.He currently serves as the marketing director of http://www.acquireo.com
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