For many people, owning a business is a lifelong goal and something they’ll only do once, so they’ll want to do it right. But perhaps because of this it can feel like an insurmountable goal. Where do you even begin?
The good news is it’s not out of reach – if you’re willing to put in the effort. Read on for our five simple steps and you’ll be well on your way toward owning your own business.
1. Start researching
Because how can you know what you want unless you know your options? Researching allows you to consider possibilities that you might not have thought of on your own. Read about the industries that resonate with you, and learn more about the realities of the business and any legislative effects on them.
You can also start looking into how much the types of businesses you’re interested in cost. Find out how many months or years the buying process could take, and what you could do in your current role to get ready.
2. Make some initial decisions
Which industry do you want to be in? It’s important to pursue a business you’re passionate about, rather than simply one that’s available. Maybe you’ve always dreamed of owning a bed and breakfast? If that’s the case, stay in some and note what you like about them and what you think makes them successful.
You’ll also need to decide whether you want to own an independent small-business or if you’d rather join a franchise. With the former you’ll have more creative control and freedom to operate on your own terms; with the latter, you’ll be supported but required to follow a set system. Think about how you like to work and how important flexibility and autonomy is to you.
3. Set your budget
Now that you’ve done some initial research, you’ll need to decide how much you can afford to pay, and how. Jonathan Payne of Xpresso Mobile Café says this is a crucial step that can’t be overlooked. “Anyone looking to start their own business needs to first figure out how and where they are going to finance it.”
There are many different types of finance a new business owner can consider, including “cash, equity, leases, equipment finance and vendor finance,” says Jonathan. That’s why it’s important to “have some skin in the game” in the form of assets. “The more assets you have, the stronger your application for credit from any provider will be.” So talk to your bank, your accountant, or an independent financial advisor. Knowing how much you have to spend ensures you’re looking at businesses that are realistic.
4. Analyse opportunities
Before you enquire about any opportunities, you need to first consider the location, size, and opportunities to grow the business down the line. You should also try the business’s products or services firsthand and get to know the surrounding area to ensure you have as much information as possible to make an informed decision.
Be realistic about what you can manage in terms of company size and financial investment. You may want to aim high but it’s probably better to start small and build from a strong foundation. Remember, the price may seem right or the space impressive, but not all businesses for sale are a good investment, or a good fit for you personally.
5. Start negotiating
When you’ve decided on the business you want, you can open up discussions with the seller or franchisor. Do your due diligence and look at the financial records of the business and any legal requirements – you may need to sign a nondisclosure agreement. Hire a lawyer and an accountant to ensure you’re asking all the right questions.
If it’s all up to par, you can start talking about buying the business. This will entail price negotiations, so make sure you’ve done everything possible to understand the opportunity and inform your decisions. If anything isn’t quite right, go back to step four and work through the process again with another opportunity.
There may be only five steps between you and your very own business, but they are complex ones, so it’s important to be patient. Buying your own business is no simple feat, but once you’ve taken the right steps and signed on the dotted line, it can be one of the greatest experiences of your life.
Keep reading to learn how to choose a business based on your skills.
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