New Year, New Direction?
Looking ahead a new year is often a time of reflection for people facing a change in their professional life, either through job loss, downsizing, or dissatisfaction with their current position. In 2020, this is even more amplified by the state of the economy and business during the pandemic.
Most commonly, people consider either getting another job, starting a business, or buying an existing business. Here’s a look at each possibility:
Option 1: New Job
If you have the necessary skills and/or experience, you might be able to get another job. If you don’t have the skills or training, perhaps 2021 is your opportunity to learn something that can move you toward a new career path or even a whole new industry. Of course, there may be more competition than in years past because of the pandemic’s turmoil to the workforce. Additionally, while in years past employers couldn’t find enough top talent, the tables have turned. This means many employers no longer feel the need (or quite simply can’t afford) to offer the enticing packages that have been offered previously.
Option 2: Start A Business
This is scary, and it should be. There are many statistics regarding business start-ups, but everyone agrees that over 50% of new businesses fail within the first year. There are many unknowns in a start up and even more in today’s climate. This is not to say that a success business can’t be launched. After all, there is always opportunity, even during recessions, for certain businesses.
If you want to become an entrepreneur just be sure you feel comfortable with answers to the following questions:
- How much capital is required?
- How will it take to open for business?
- Where will you find employees?
- Can you get necessary permits?
- Can you find the proper location for your business?
- How long will it take to get the income up to a point where you can start taking a salary?
For additional resources and a mentor, check out SCORE’s Startup Roadmap.
Option 3: Buy An Existing Business
There are eight significant advantages to buying an existing business versus starting a business.
- You can review actual operating results rather than projections. If a business has been operated by the same owner for a number of years and if that business has been the source of income for his family, you can be reasonably sure that the business is profitable and viable.
- Immediate cash flow. No expensive advertising to lure customers – the cash register starts ringing the first day you take over, just like it did the day before for the seller of the business.
- Trained employees in place. When you take over the business, you will have a complete crew of trained employees to run the business. No down time for training and no customer dissatisfaction with untrained employees.
- Established suppliers and credit. For the most part, the existing vendors will continue to do business with you without missing a beat. Remember they have been supplying the business for a while and they know it is a good business. They don’t want lose your business, they want you to succeed and buy more goods and services from them.
- Established customers and referral business. Your customer base is already in place and it will , through referrals, continue to grow – unless you drive them away.
- Existing licenses and permits. In many cases, all you have to do is transfer the licenses and permits to your name. In those cases where you have to re-apply for a license or permit, you have the comfort of knowing that the business, in its current location, was approved for the license or permit.
- Training by the seller. In addition to the trained employees, you will receive training from the seller in how to operate the business. You will be introduced to customers and suppliers and will get the benefit of the seller’s extensive experience in running the business. You will not have to make the same mistakes the seller made.
- The availability of seller financing. Over 75% of businesses sold by Alliant Capital include some seller financing. This may be one of the single most important advantages of buying an existing business. The seller has a vested interest in your success, and will provide you with the best possible training and advice in order to protect their investment.
As the Mid South’s largest intermediary firm, we have a long history of helping people find the right business for success. We understand that the right business will fit both your personal and financial needs. To speak with one of our trained team members, contact us today. Or begin by browsing our current business listings.