Starting your own Business, What type.

Advertise here!

Turning your dream into a reality

What type of business?

A term that's often thrown around is that to be a true entrepreneur you must start a small business from scratch, this is completely false, there are a variety of options available to you when you go into business.

Start-up

A completely fresh venture, a company to compliment one you already own, a group or a fresh business in a new field for a current business owner. Obviously this is the cheapest option and quickest to obtain, however its all on your shoulders, for the first few months, or maybe even years, you are the business.

Franchising

Franchising is where the original business owner (franchisor) duplicates an existing business idea through people like you and me, who each run their own outlet. Franchises often don't have the freedom you would have in your own business but the upside is they have an establish business model that works.
There is nothing wrong with copying and improving good idea when it comes to money, nothing less important about it or less successful when it comes to providing good service or value.

Existing businesses

An existing business has a proven history or track record but get absolutely clear on why the owner wishes to sell, not just the reasons they are giving you.
Do you research, looking through the accounts and if you can chat to any staff and asses their mood, supervisors and managers are a great source of information; are they competent, do they seem liked by the staff generally and happy in their job? Are the systems of the business up and running smoothly, does any stock control system seem relevant and up to date or are things in shambles, how are sales leads generated?
Do they get any return customers and what percentage? A great way to asses how happy their current customers are.

You need these fundamentals before you can make any kind of accurate decision to buy. Look at any accounts they give you with an extremely skeptical eye, do you own calculations on for instance how many sales units they are moving and the relative costs involved and see if it matches up with their version.

If you can make a few Mystery Shopping trips or get someone you trust to, see the companies service and competence first hand. Call them up as if you wished to buy something or better still buy a small product or service from them and see how its handled, see if the people on the phones have the knowledge or obtain it to solve a query you put to them.

Finally is the loss of the existing owner going to cripple the business, are they an asset that just cannot be replaced? Can you see the opportunities when you take over, can you see how things can easily be improved and capitalized on?

Special consideration – Family Business

Taking over a long established family business can often breathe a fresh lifeblood into an existing system with good results, however bringing in outsiders to be part of the business is often a thorny issue, as is change in general and one you should deal with upfront before taking this option.

Special consideration - Management buy in or buy out

This is the general term for a manager or group of mangers that buy out the business they are working in, a buy in is the same except the managers are from an outside source.

I mention this because its often one people don't consider. Before you quit your job, one you know like the back of your hand, have you considering offering to buy the owner out, especially if they are struggling?