Finding the best small business opportunity is the dream of many people but it can be rather easier to talk about than actually achieve.
If you are interested in such an opportunity, here are a few thoughts than may be useful.
Can I Buy A Great Small Business?
Yes, certainly. It’s worth being a little bit cautious though even before you get into looking at the details. The reason for the sale may be genuine such as retirement, relocation, a change in life-plan or ill health etc. Yet there’s a grain of truth in the old saying that people don’t often want to sell a successful business – so ‘looking under the rugs’ is always a very good idea!
What Should I Be Looking For If Buying A Business?
The answer to this depends upon what the business is and why you want to buy it. As a general rule it may be highly advisable to get specialist accountancy advice to check the business books and legal advice to protect your interests.
If you’re buying an active business, look out particularly for:
- Debts that may come with it ‘on the books’
- Ditto for other liabilities
- It’s cash-flow history and profitability
- Future growth potential – in other words, beware of buying a dinosaur that already has its future securely behind it and which is marching confidently forward to extinction.
At the risk of sounding a little cynical, it may be unrealistically optimistic to assume that the vendor is going to spontaneously mention every problem with the business. As a result, remember to ask around the locality or if it’s an e-commerce operation, try and check around the market to find out what the ‘talk on the street’ is about the business.
What about starting a business from scratch?
A great idea – but you’ll also need another great idea to get it started.
There’s no easy way to outline how to identify a business opportunity. You will need that flash of inspiration that many people have tried and dismally failed to describe.
Once you’ve got your idea in principle though, it’ll be time to put on that hard-nose business attitude and start to flesh out the bones.
How new and revolutionary is your idea? If there are already 25 companies in your area alone that are offering the same products or services, how are you going to differentiate your business from theirs?
- What market research have you done – if any? What is it telling you?
- What will you need to help you make your business ‘happen’? Who needs to help you with things such as technology, accounting and stock etc?
- Where is the startup finance going to come from?
- How are you going to make it a success? This includes thinking through how you’ll deal with any foreseeable problems along the way.
- What will be the legal basis of your company?
Putting a summary of these things together (and several others) constitutes what’s called a business startup plan.
What About Hard Work?
Hard work, dedication and self-belief will be critically important in turning your business opportunity from an idea into a success but contrary to cozy myth, they won’t in themselves alone help you win through. None of these things can turn a bad idea or bad plan into a winning business.
Key to success will be the identification of the right opportunity, a good sound plan, financing and help.
How Do I Get Help With Business Finance?
There are many misconceptions around bank loans for business – usually along the lines that the banks don’t want to help. In reality, banks make money or at least they should make money, out of loans. They are therefore normally eager to advance finance, as are some venture capital companies, for ideas that strike them as having merit and potential.
What banks want to see is a good idea supported by a sound plan.
What they don’t want to see are applicants ‘winging it’ as they go along or poorly thought-through proposals for financial aid. It may also be advisable to show that you’re putting some of your capital into it and sharing the risks with them. You may also need to grit your teeth and offer security against some of your assets to secure the loan.
Should I Consider Franchises?
This can, in the right circumstances, be a good way of starting a business with a relatively low stake and knowing that you have a support organization in place to back you up – at least to some extent. On the downside, the returns may be steady but will perhaps be unlikely to jump you into the ‘super rich’ list very quickly!
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