Wondering if you should start a business or buy a business? It depends! Do you have an idea? How much money do you have? How much time do you have? There are many questions to ask yourself! Watch the video below and read on to learn about the benefits of starting a business, and the benefits of buying one.
First, what is the purpose of a business?
A business is a vehicle that can drive your life personally, professionally, and financially to a new place. It’s different from a passive investment, like real estate or a stock market investment, which doesn’t require effort from you (or that much effort, anyway!). Thus, making it successful when it comes to starting a business on your own, becoming an entrepreneur. The first thing you would need is an idea and an inspired thought about how to bring a new product or new service to market. The development of that idea must then help you decide who your customer is and understand that customer avatar. You’re going to make assumptions about how to reach that perfect avatar with what kind of marketing. What’s the messaging? Where to spend those advertising dollars? How many advertising dollars do you have to spend to get an expected result? There are several factors that entrepreneurs have to building a successful business. There’s a trial and error period, and it’s during that trial and error period that the majority of startup businesses will fail. In fact, the SBA reports that 90% of small businesses will fail before their fifth anniversary. That’s not a good statistic. However, if you are an entrepreneur, and you have a great idea and can bring it to the market, there’s probably no better path to personal and professional satisfaction than success as an entrepreneur!
So, why would somebody buy a business instead of starting one?
If you are in career transition, and you are the primary breadwinner in your family, and you need to make money sooner than later, buying an established business could be the fastest route to trying to recover that income for which you’re looking.
Many times people believe that by investing in an established business, they’re lowering the risk of starting a business. There are a lot of assumptions that go into buying that established business that may not prove to be true once the new owner takes over. For example, if you have a mom-and-pop business that was brought to market by the entrepreneur and that entrepreneur steps out of the business, are the customers in the community that are used to doing business with that business owner still going to do business with you? That’s one assumption among many assumptions.
What’s the value of investing in a franchise?
The real value is that we are mitigating the risks of starting a business because we’re partnering ourselves with people who’ve already gone out there and figured it out. We’re buying a proven business plan and support. We’re buying a ready-made toolbox of marketing—this understanding that they’ve already figured out who the customer is, how to cost effectively reach that customer, what’s the messaging, where to spend those marketing dollars, how many marketing dollars to spend, and how long we’re going to have to spend those dollars to build a positively cash-flowing business. They’ve created technology that helps you run your business efficiently and effectively.
One of the greatest advantages of investing in a franchise, whether it’s an existing business or from the ground up, is that you, as the owner of the business, get to be the CEO. You work on your business rather than in your business. That’s going to allow you to be able to scale the business much faster. In the entrepreneurial scenario, an entrepreneur may spend three to five years perfecting one location of their business. In that same three to five years, a franchisee, who starts out working on their business rather than in their business, could have three to five locations up and running. Since the wealth in a business is typically created through that scale, franchise businesses can lead to wealth creation that much faster.
All businesses are viable. Whether it’s starting a business from scratch, buying an existing business, or investing in a franchise business, they all have merit. It really comes down to you as the owner. What are your personal, professional, and financial goals? What time frame are you putting forth to achieve these goals? It really just depends on you and your goals. It depends on your confidence level, risk tolerance, and your financial resources. It depends on if you have an idea. There are a lot of depending factors in this conversation. This why I have a business: to help people figure out what is the path of least resistance for them to find the right business vehicle for their future.
Do you feel like you need some clarity or guidance around your goals of becoming a business owner? If so, please send me an e-mail right now!