What are my options for buying or starting a business?

April 2nd, 2012 by Andrew Rogerson | 2 Comments

What are my options for buying or starting a business? You have been in Corporate America for years, learned the ropes including when to stick your neck out do something…or not; but now you have come to the decision that there is more to life than the whims of an employer and so it is time for you to start your own business…now.

How exciting!!!

So you have some questions and one of the first has to be – what are my options?

If you have decided you want to start your own business you only have three options. The first option is to start your own business and do it all from scratch. The second option is to buy an existing business that is for sale and build on it. This option will only work if you have some money you can get to fund your purchase. Perhaps Donald Trump is your neighbor and you are on first name terms then that is a great place to start. If that is not the case, perhaps you have some money in a 401k or have some family or friends that believe in you, then that may be a better option. The third and final option is to buy the rights to a local franchise.

So there we go. Perhaps you thought there was only one option but in fact there are three. But how do you decide which one’s the right option for you? I would suggest it’s no more complicated than four factors. In no particular order, these are your personality, how much money you have to invest, your risk tolerance, the role you would like to play in the business and your personal skill set.

The following table may give you some help looking at each of the three options then decide what makes the most sense to you.

Start a new business
Buy an existing business
Buy rights to a franchise
Availability
None
Limited
Many
Established business methodologies
None
Hopefully
Yes
Documented processes
None
Limited – if at all
Yes
Training
None
Initial two weeks or so
Initial and ongoing
Investment V Profit
None
Yes
None
Support during ownership
None
None
Yes
Risk
Highest
Unknown until you are the owner
Many variables
Finance availability
Very difficult
Yes
Yes
How to predict success
Success based on projections
Success comes from history only
Success based on current owners feedback
Decision maker
Owner
Owner
Follow the system
Instant cash flow
No
Yes
No
Established customer relationships
No
Yes
No
Established relationship with suppliers
No
Yes
Maybe
Established reputation
No
Yes
Yes
Established brand
No
Yes
Yes


Still not sure where to start or you would like some more information? There is plenty of free information on this website. If you prefer, I have a book on each topic. The first title is ‘Successfully start your business.’ The second title is ‘Successfully buy your business’ and the third and final title is ‘Successfully buy your franchise.’

You can keep working for someone else and build their dream or you can break out and build your dream; the choice is yours. Good luck deciding.

Related posts:

  1. Benefits of buying a business versus starting a new business
  2. Look before you leap when starting a business
  3. Buying a franchise is more like making an investment
  4. Growth industries if you are starting a business
  5. Blog about selling a business, buying a franchise and more

CATEGORY: Buy a business, Buy a franchise, Sell a business TAGS: , , , , , , , , , , ,

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Comments

  1. Business sell Canada says:
    June 21, 2012 at 4:10 am

    As you describe in this table about risk factor in buying an existing business case that “Unknown until you are the owner”, in my opinion it is 50% correct but if you are buying a existing business then it has more reputation and more loyal customers which gives you more benefits rather than a new business.

  2. What are the options to own a business? says:
    October 30, 2012 at 9:23 am

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