29 May Around the Web: A Week in Summary
A recent article from Techspective entitled “Smart Tips to Remember When Buying a Business” pinpoints the most crucial considerations a potential business buyer must look at before deciding whether or not to buy a particular business.
With the impending retirement of thousands of baby boomers, and an increasing cultural interest in entrepreneurship, the rate at which businesses exchange hands is at an all-time high. Still, deciding to go into business for yourself is a major life decision and should be approached with careful consideration. Here are some essential things to consider before buying a business:
- Is it best to buy an existing business or start one from scratch? – There are pros and cons to each side of this and all should be considered before moving forward.
- What type of business are you buying? – Certain types of ownership transfer any liabilities that accompany the business to you when you take over, and others leave any liability for the previous owner to shoulder. Make sure you understand which is the case before entering any potential deal.
- Am I overpaying? – Do not skimp on due diligence, make sure you consult a trusted advisor, and thoroughly inspect the business from its financials to its physical location, current practices and future potential. Know what you’re paying for and why you’re paying what you are.
Purchasing a business is a major decision, and it is one that while worthy of celebration, should not be taken lightly. If carried out correctly, the purchase of a new-to-you business could be the open door to the life you’d always dreamed of. If not, it could mean a plethora of unpleasant challenges.
A recent article from Exit Oasis entitled “Planning to Sell your Business Because of the Silver Tsunami? What if it isn’t Coming?” dissects the idea that there may not be as large of a need for the Exit Planning as a Service niche as currently believed due to the retirement of the baby boomer generation.
With around 10,000 baby boomers turning 65 every day, it is understandable why there has been so much hype around the impending influx of related businesses available for sale. However, these nine factors would indicate that the massive need for exit planners may not be as massive as advertised:
- People are living longer, and therefore working longer.
- If a flood of baby boomer businesses go to market simultaneously, supply and demand will drive prices down and may prompt many owners to either wait or decline to sell altogether.
- Many of these businesses will be in the service sector, which may be difficult to receive funding for.
- Others are likely to require hard work and labor that most gen x and millennials won’t want to do in the age of internet businesses.
- In the case of web-based businesses, it may be cheaper for entrepreneurs to start a new business than it is to buy an existing one.
- The amount of technology available to automate previously human-done labor will render some businesses unsellable.
- The next generations don’t generally have a financial standing or the capital conducive to purchasing a worthwhile business.
- The rapidly growing age of technology has presented an endless number of potential businesses that don’t exist yet. Many entrepreneurial-minded individuals are going to want to pioneer these fronts rather than acquire a pre-existing one.
- An advisor who is looking to transition to exit planning as a niche will need their financial skills to match their coaching skills, and the combination is not as common as possessing one or the other.
While it’s a sure thing that EPaaS work will be relevant and necessary given the upcoming wave of baby boomers reaching retirement age, it is certainly arguable that these factors will significantly diminish the currently perceived need.
A recent article from Business.com entitled “How to Know if Franchising Is Right for You” explores the questions every potential business owner must ask themselves if they’re considering joining a franchise.
If you’re interested in purchasing a business, it’s very likely you have stumbled upon the possibility of buying a franchise. This option comes with many perks, such as a network of ongoing support, well-known branding and a reduced risk of business failure. However, it’s prudent to make sure that you’re well-suited to be a franchisee before choosing this path. Here are some questions to ask yourself before making the decision:
- Do I want to use an existing system and follow established standards? – Franchising may not be the best option for you if you like doing things a certain way and don’t do well playing by other people’s rules.
- Do I want to work with a team of experienced people who will guide me along the way? –Franchising is best suited for people who work well in a team environment. So if you’re the type who works best solo, it might be best to reconsider your other options.
- Do I want to join an established franchise or an emerging franchise? – There is more flexibility with emerging franchises while established ones offer more security. Be sure to weigh the pros and cons.
- Am I prepared and experienced in all aspects of running a business? – Get ready to work and to delegate! From accounting to marketing to scheduling, there’s a lot to do as a franchisee.
- Do I support the franchisor’s mission and values? – You are going to be working many aspects of the business as a franchisee, and are going to fare much better if you actually care about and enjoy the work you’re doing. The same goes for your employees.
The search for a business can be a lengthy road, but that’s okay! Take your time and do your research to ensure that you’re choosing the right fit for you.