That depends! If you are considering entrepreneurship, one of the first questions that you will have to ask yourself is whether you want to start a new business or buy one that is already operating.
Should you start a business?
Perhaps. But make sure you consider the following…Do you have:
- A new business idea or concept that is marketable?
- The time and money to invest in marketing to attract customers to your new business?
- The ability to float the business and yourself while your new enterprise ramps up to generating sufficient revenues to permit you to take a salary? Or, will you need to take on a side gig to support yourself in the meantime?
Starting your own business can, of course, be very rewarding , exciting and give you plenty of opportunity to learn from your mistakes as you work out the operational kinks.
Should you buy an existing business?
Buying an existing business permits you to jump right in to a turnkey operation as soon as the ink is dry on your closing sale documents. The benefits to buying an existing business are numerous:
- An existing customer base;
- Existing employees; and
- It may be easier to get financing.
The biggest bonus is that you will not be starting your enterprise from scratch. Presumably, there is an operating system in place and the kinks (at least some of them) have already been worked out.You may also be able to enlist the seller’s support for training in the business and to ensure a smooth transition.
However, buying a business typically requires a greater initial investment than starting a new venture from scratch. It also requires you to conduct adequate due diligence to ensure that you are not overpaying for the business that you are acquiring.
What other ways are there to “be my own boss?”
There is a third option. You can buy the rights to open a franchise. By joining a “franchise system,” you will:
- Participating in a business model with a proven performance record;
- Benefit from operating a known brand which will help draw customers immediately as soon as you open your doors;
- Receive training from the franchisor on business operations; and
- Have the opportunity to tap into the expertise of the entire franchise system, connecting to franchisees at all stages of growth to share ideas and discuss what works and what doesn’t.
Is franchising right for me?
That depends on you. It may not be the right fit if you prize your independence and like to make all of your own decisions. If you buy a franchise, the franchisor will have the right to dictate various aspects of your operations. And, you will have to pay ongoing fees to the franchisor.
So, think carefully.
But, whatever you decide, you will want to speak with a business attorney who can guide you through the process. Got questions? Feel free to email them to me, Julie Lusthaus, at [email protected] and let’s talk.