Have you ever thought about starting your own business, but you haven’t acted because of the fear of failure? Starting a new business is definitely not a sure thing — up to 60% of new businesses fail within the first few years. Fortunately, if you’re really interested in being your own boss, there’s another option available that offers a greater chance of success. The best way to be your own boss is not to start your own business. The best way is to buy your own business.
Research has shown that when established businesses are bought by a new owner, there is a much lower failure rate than with newly started businesses. When you buy your own business instead of trying to start one from scratch, there is simply much less risk involved. Let’s take a look at some of the advantages you gain when you buy an established business.
When you buy your own business, you’ll have the opportunity to review actual results. You won’t have to rely on projections or try to estimate the potential of the market. The viability of a particular product or service and the demand for it will be there for you to see in black and white.
An established business will provide you with immediate cash flow. New businesses often take several months or even years to show a profit, assuming they are able to stay in business at all. When you buy your own business, you can avoid living through these painful times and take advantage of an immediate and ongoing positive cash flow.
Depending on the size of the business, an established company will have trained employees already in place. When you start your own business, you will be responsible for immediately locating personnel and training them to sell your product or provide your service. In many cases, the experienced employees in an established business will actually help train you.
Businesses that are already operating will have existing agreements with suppliers. There’s a good chance the previous business owner will have already done the hard work of finding the highest quality, most cost-effective suppliers. You can benefit from his hard work.
Usually, when you buy your own business, you’re also in effect buying their customer base. An ongoing company already has established customers and is already receiving referral business. Not only do you profit from these existing sales, you can begin building on an established foundation instead of starting from ground zero.
One of the most difficult and frustrating parts of starting a new business can be obtaining all the necessary licenses and permits, and jumping through regulatory hoops placed there by local, state and federal governments. When you buy your own business instead of starting one, all this red tape will have already been dealt with. All you have to do is keep things in order and not miss the renewals.
If the previous owner of the business is willing, he can be a source of excellent training for you. If he’s been running the business for a while, he’ll be able to teach you how to maximize opportunities and avoid potential obstacles. Seller training like this can be invaluable.
If you want to buy your own business and be your own boss, an established business will probably require a higher initial investment. But the beauty of an established business is that financing will probably be a lot easier. The performance and profit of the business will not be in question. A business plan is likely already in place. Most of the problems have already been discovered and solved.
It’s important for you to know ahead of time — before you even start looking — what kind of business you want to buy in the first place. Decide which kind of business is right for you. Then do plenty of research, not just about a particular business, but about the whole market or business sector in general. Once you’ve identified a profitable market where you have both skills and passion, then you can begin to target specific businesses. You may find good businesses for sale, but don’t limit yourself to only these. You may be able to make an offer on an existing business that’s not currently for sale.
If you’re hungry to be your own boss, but you’re not interested in years of risk and uncertainty, then you should consider buying your own business. Buying an established business may be the closest you can get to a sure thing in this world.