Your Own Business

I think this is what most people dream of.  At least I did.  Here's the scenario--driving to work at any time you want to in your vintage sports car, being greeted by your adoring but subservient employees, meeting with your loyal and satisfied customers and then driving home, say about three or four in the afternoon, to your palatial estate.  That's what I wanted.  The reality is somewhat different but doable.

I worked for two guys that had their own businesses.  One was a crook and the other was a social misfit.  They had to have their own business because they really couldn't work for anybody else.  So if you can't stand to have a boss then start or buy your own business.  (In reality everybody has bosses.  If you own your own business, the boss is the customer.)

But how do you get your own business?  One of two ways--start one or buy one.  Starting one is not hard and, thanks to technology, can be done in your spare time.  If you sell something on Ebay, you have your own business.  If you mow lawns, you have your own business.  (Don't laugh about the lawn mowing.  I was at a golf tournament with a friend and commented about a huge home overlooking the course.  Turns out the house was owned by a friend of my friend and the guy owned, you guessed it, a lawn service business.  In other words, he, or more correctly his employees, mowed lawns.)   

When people think of starting their own business they usually think of inventing something or coming up with a new product that everybody needs.  That doesn't happen very often.  There is only one Bill Gates in the world but there are lots of lawn care businesses.  If you want to start a business, find someone that has already done it and do what they do.  If a guy can become a millionaire mowing lawns then you can become a millionaire doing something similar.  My experience is that very successful business people know everything about their industry and are great delegators.  They are also efficient.  They work long hours but they report to themselves so who cares?  The first steps to take are go to the libary and read books on running a business.  Then find somebody in the field you want to work in and do what they do.  You may fall flat on your face but you can do that anywhere.  The key is trying.

The second way to get your own business is to buy one.   This is the preferred approach by most experts.  You can start by looking up business brokers in the phone book or going on line.  You don't pay a commission to buy a business, the seller does.  Also, you probably won't find the business you want right off the bat unless you want a liquor store or a dry cleaner.  But you will learn something about the world of small business.

Here's the main thing you need to know--you don't need a lot of money.  A person selling his business almost always has to offer financing.  Banks will usually only lend against hard assets.  Hard assets are plant, property and equipment.  Stuff they can sell if you default on the loan.  The majority of successful companies are worth much more than the equipment.  Starbucks is a franchise worth millions, billions, but not because of the expresso machines.  But a bank will lend only on the value of the expresso machines. 

So the majority of sellers of small companies must provide financing to prospective buyers.  That means you can buy an established business even if you don't have a lot of capital.  And most likely you will be successful.  A business broker told me that a new owner, on average, increases sales 20% in the first year just by bringing new blood to the business.

The action steps are the same--go to the libary and get a bunch of books on buying a business.  Then get out the phone book and talk to a bunch of business brokers.  Or put an ad in the business section saying "Young Buyer Looking To Acquire Established Business."

But after the books and the brokers, take a long look inside yourself.  Try to determine if your desire to own a business is a reality or just a fantasy.

Comments

[Cara Fletcher]

Starting your own business can be very hard at the beginning but when you get to know how to rule your business you'll see that it's worthed the efforts.

[Victoria]

The other thing to bear in mind when starting a new business is how to manage your cashflow.

For cashflow management tips check out my article at: http://www.onstop.co.uk/cashflow-management.htm

[NCN]

Ask Uncle Bill,
I've thought about opening my own small-town restaurant, but right now I don't have the cash. So, I'm spending my time LEARNING all of the details of owning my own business. I will not jump in head first. I'm going to educate myself first.

Thanks for your blog,
NCN

This comment is part of my "100 Comments Series" over at No Credit Needed.