Buy a Business Or Start From Scratch

A commonly held belief is that it is better to start your own small business rather than buy a business already in existence. The reasoning is that entrepreneurs shouldn’t incur the extra expense of paying for goodwill. It’s also said that buying a small business is merely acquiring someone else’s problems.

But in most cases, the best strategy for someone wanting to own his or her own small business is to acquire one that is already well established. Here are five principles to consider when making the decision about how to get into business.

1. Value of immediate income: Even though the entrepreneur starting from scratch will avoid having to pay someone else for “goodwill,” there still is the cost of setting up and operating the company with no income to offset expenses. Sometimes it takes a year or so before a new company starts showing a profit. And in the majority of cases, someone buying a business can look forward to collecting income from day one, or shortly thereafter. Customers buying products or services already exist, and the company has the needed products in inventory or the support system ready to provide the services. Remember when making the cost comparison to calculate the revenue lost that is associated with starting a business that doesn’t produce income for a while.

2. What’s the entrepreneur’s time worth? While the DYI entrepreneur is making arrangements with suppliers, deciding on product offerings, and setting up the marketing, service and other functions, the new owner of an ongoing company can focus more on learning the business and developing tactics for boosting revenues and profits. The owner’s time is money and it usually is a better use of time to focus on building up what’s already there, rather than establishing the relationships and creating the mechanisms so the company can begin to generate income.

Many entrepreneurs prefer to find their own location, negotiate the lease, line up vendors, interview and hire employees and establish the systems and infrastructure needed to operate. But these processes often take more time than anticipated–time that might be better spent making sales and improving efficiency of an established business.

3. Cost of capital equipment: If the kind of business being considered does not require much in the way of a cash investment–a brokerage for example, or if the equipment in an existing purchase candidate is old and out of date, there might be no strong reason to take over someone else’s enterprise. Certainly not if it involves buying machinery that doesn’t contribute to the business. But if capital assets of the business being considered are involved in the company’s success, it’s a better deal to buy a business with its used fixtures and equipment priced at the market or under-market rate usually allocated to such assets, rather than incurring the cost of new furniture fixtures, and equipment, along with the expense of installation and set up.

4. Training and consultation: Even investors in a business they know how to operate can benefit by taking over an existing company, if only for the consulting and training they usually can get for from the seller. And this assistance is likely a vital part of a deal, when a buyer is getting into an enterprise for which he or she lacks experience. Why do franchisees who want to expand to more outlets often prefer buying a business from other franchisees rather than create a new business to operate under the franchisor? It’s because the seller can provide important insight into handling the customers, exploiting the opportunities for growth and managing the current employees.

5. Financing the business: There are entrepreneurs who resist buying a business because they don’t like the idea of working for the seller–that is, having to pay some of their income to the person who sold the business. What they are forgetting is that those payments are possible to make, thanks to the revenue generated by the business. Besides, seller financing usually comes with the best terms available. Starting from scratch often requires a loan from a small business bank, or from a finance company associated with the firm that provides the equipment needed in the business. And that’s usually a high-cost loan calling on the borrower to pledge assets in addition to the equipment and fixtures being used in the business.

Yes there are businesses for an entrepreneur to get involved with that are better to start from scratch than to purchase. But those are the exceptions. In most cases, if a person ready for his or her own business evaluates the options using the five ideas presented here, the choice usually will be to buy a business already in existence.

Start Right In Your New Business

Here are a few small business tips for new small business owners or for those of you who have been planning on beginning their own business. Starting a business is certainly rewarding and exciting for most people who plan correctly and put the good strategies in place. However unfortunately this is not everyone and quite often the failure of a small business is due to not knowing what to do.

The first thing I did in starting out in business was to educate myself and find good people to be around. There is just no possible chance that you can know it all and rather than struggling to find the answers it’s a lot smarter to have a mentor who has done what you’re trying to do.

The first are you will want some assistance in is budgets and finances. Hey if you don’t have any money then your business won’t last for long. Write down your budget plan. You need to know what you can afford vs. business items that are optional.

At the beginning just focus on the things your business really needs. You can always pick up other products for your business once you are more established and the money starts flowing on. I always thought getting things that would make me more money were important items to have such as a phone, diary, ear piece, website, business cards, etc all things that would make me money back.

Also it’s smart to get someone else doing the books; a good book keeper can saves you hours of frustration and time that you could be using elsewhere on making money in your business. Marketing is crucial for any business that wants to be successful and make money. Marketing is as simple as exposing your business and its products or services to other qualified people who might need to use them.

Without qualified leads each day or no one walking into the store you will not get anywhere in your business. You should send out a powerful message to let people know you are alive. This is why some business owners fail because they are only getting 3 clients each month or not even that. There are over 50 ways you could market your business and ½ of them are free and just take your time and effort. Using marketing groups who can teach you how to build marketing channels and systems is a clever way to ensure your success. Look for people who generate lots of leads themselves and follow the systems.

Choosing or creating the right logo is important when establishing yourself as a well recognised business. You want something that you can use that brands you and your business, something that people can identify your company. Try to go for a logo that is clean and elegant for your type of business. Stay away from any types of logos that are by any means inappropriate and do not send the correct message concerning your business.

Finally become a business networker. This is very important to forming good business relationships, with not only your prospects and customers but with other business owners in the area. These partnerships if built correctly should bring in referral business and allow you to save on your marketing costs.

Remember when just starting in business to be in control of everything, now where the money is being spent, know what brings you in the most business and measure how effective your business is with some of the key areas. Then adjust whatever is not working.

Are You in Love With Your Business

Many people from a variety of different disciplines have talked about the importance of loving what you do for a living. Yet for many of us, the reality is quite different. Somewhere between our childhood dreams of achieving our ambitions and the practical realities of actually running a business, we lose our passion. We lose touch with the very thing that could lead us to success and instead find ourselves chasing the money, or simply settling for less and following the path of least resistance. If this is you, rest assured its never too late to fall back in love with your business.

As an entrepreneur you have a tremendous opportunity to embrace what you do with passion. You have an entire business landscape before you to accomplish whatever it is you desire. You are truly without limits. There are no earning caps or time clocks or people to tell you what to do and what not to do – the only limits are those you place upon yourself. If you are like most business owners you probably became self-employed because you were attracted to the idea of more personal freedom. You wanted to be your own boss and had some great ideas you wanted to try. You were passionate about those ideas. In the early days, I bet you were full of passion and excitement, like the first days of a new romance. All you could think about or talk about was your business – it was an exciting time. However since then, you will have been through a lot. You’ve worked hard and will have received some level of rewards. Your love of the business will have ebbed and flowed. Ask yourself now, are you in love with your business still? or has it merely turned into a long-term partner, a reliable companion?

If you answered the latter then it is time for you to rekindle the flame. Desire is key. It is desire that acts as the rocket fuel to success and propels individuals who would otherwise slip into mediocrity to the top of their field. In the words of Will Rogers “If you want to be successful, it’s just this simple. Know what you’re doing, love what you’re doing and believe in what you’re doing.”

Here are some suggestions for you to reconnect with your original passion:

1. Get present

You are unlikely to achieve success if you lose yourself within your business. Too many entrepreneurs work so hard and such long hours that they forget to sit back and enjoy the fruits of their labor. They are so busy working in their business that they forget to work on their business. It is really easy to lose sight of everything you have achieved since you first began, as many of us are already focusing our sights on what is happening next week, next month and next year. Get present. Bring yourself into the now and realise everything you have accomplished as an entrepreneur. Consider all of your customers, whose lives you have not only touched but improved with your product or service. Think about your employees and how you support them and their families. Think about your business, your products and services, the feedback you have received on why people buy from you. Think about what you do well and everything you have learned along the way. Think about yourself as a business leader and how your confidence has grown alongside your business. Enhance the positive and notice how you feel. There is a lot to appreciate and we don’t do it often enough. So make sure you take the time to get present and realise how far you have come since the day you first began.

2. Know your why

Remind yourself why you went into business in the first place, what were your original dreams? What was important to you back then? How do your business goals fit in with your personal goals and life purpose? Get back in touch with your initial motivations to remind you of the bigger reasons behind what you are trying to achieve.

3. Think big

Let go of your limiting beliefs and expand your belief system. Most people who are stuck in a rut suffer from limited thinking, the nagging doubts that set in when we question whether we deserve the success we strive for. Fear and apathy are the greatest obstacles to success and need to be banished from your life. Give yourself permission to succeed. Think big, believe big and you will achieve big. Everyone who is extremely successful in business today, all started out somewhere and most of them had humble beginnings. Many of the men and women who lead America’s Fortune 500 companies started out with nothing but saw beyond the low expectations of those around them. They thought big. They continuously expanded their belief systems and stepped onto their learning edge, pushing themselves beyond what others around them may have believed possible until their dreams became a reality. You have the same power. All of us do. If you set your goals with true passion you will believe in the potential of what is possible for you. So what are you waiting for? Expand your horizons, even if at first you find it challenging. Affirm all that you are and all that you want to be. See what happens to your life if you act as if anything were possible, if you open yourself to the opportunities around you – the results will amaze you.

4. Follow your bliss

Everybody has certain things which they love to do within their business, those things that we have a natural talent for and which feed our energy. Then there are the other things, those that drain the very life force from us, which we usually try not to do. Find what you love to do and do more of it. Where possible delegate the energy drains to other people. This will help to support your passion and keep your personal energy high, to drive your business to success. Also every market has certain people you naturally feel connected to and like to be around. When the energy is right you have a tremendous opportunity to go beyond the normal business relationships and develop true friendships. Finding your “people” will energize and invigorate you in ways you never thought possible. So take the time to consider your niche, find the people you want to work with, who share your passion and you enjoy spending time with and aim your business in their direction.

5. Find the fun

Whoever said that work should be “hard work” was wrong! The more fun you have within your business the more time and energy you will be prepared to invest in it. So work out what you love to do and find a way to get paid for it. Be creative! If you love socializing find a way to do more of it. Invite your clients to an “I love my clients picnic” and enjoy getting to know them a little better. Find creative, out of the box ideas to break up the routines of daily business life to make your business and your life, just a little more fun.

6. Discover the magic of flow

Think about the energy you bring to your business. Everything is made up of energy and we are giving off certain messages via our energy whether we realize this or not. Your personal energy is fuel for your business. Your potential clients will pick up on your business energy and will make decisions whether they want to work with you or not, so it pays to ensure that you are in flow. Ask any athlete about being in flow or “in the zone” – these are those magic moments when everything comes together with a forward momentum that puts you at the top of your game. Embody and memorize that feeling as you can use this to propel yourself forwards at times when you need it most. Magic happens when you use all of your senses to envision shifting into your high performance zone. If you can imagine it, you can move into flow and then there is nothing to stop it from becoming a reality.

7. Be authentic

Build a strong relationship with yourself, get to know yourself in all your glory so you can show up with your whole self to your business. Nothing stops flow faster than you being out of alignment with your authentic self and your core values. You need to know with unwavering certainty, who and what you are. Too many entrepreneurs make the mistake of being who they think they “should” be, or who they think their customers want them to be rather than being who they really are. You need to ignore those people who try to get you to compromise yourself. Don’t allow anyone or anything get in the way of you being who you know you can be. This is your life you need to live it. Don’t waste time impersonating yourself – if you are not going to be yourself who will be?

Set your performance meter to high and focus on the quality and value that not only serves you and your family, but also enables your best self to show up to your business. Great quality of service, impeccable integrity and a caring attitude towards your customers will always attract referrals and repeat business. If you follow these suggestions your clients will notice and they will begin to reflect your passion back to you. If you do this right you won’t be the only one to fall in love with your business, your customers will too.