If you want to be an entrepreneur and own a business, buy an existing one
When the subject is entrepreneurship, most of the talk centers on the process of starting a new business, getting venture capital funding and attention, and ultimately reaching the moon with it. The story of the guy or gal with a simple idea who goes on to change the world and make a lot of money is understandably compelling to those who dream big.
It is also misleading. Such a success story is pretty rare in the business world when thousands of new ventures are launched every month. Most startups fail without much attention or impact on the world. It is not an easy route; getting through the startup phase is a tremendous challenge.
Meanwhile, there are many successful, long-term businesses out there that are available for sale without much awareness by most aspiring entrepreneurs..
I'd like to encourage those planning an entry into the self-employed world to consider buying a successful, existing business. It's offers a much clearer path to success than starting something new.
If you have interest in this topic, I recommend following the work of an expert in the "Acquisition Entrepreneurship" field, Walker Deibel. His book, Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game, was published just a couple years ago and is the bible on this topic. It's an excellent book and resource that was enjoyable to read. It's actually used as a textbook in elite business school entrepreneurship programs.
In summary, his argument for buying an existing business is:
the business is already successful and proven with a product/market fit and current customers/cash flow (the new owner is welcome to improve and build upon things, but does not have to create the success as in a startup). The risk of failure in acquisition entrepreneurship is very low (under 2%).
it is relatively easy with affordable debt financing (e.g. SBA small business loans) to buy into a company of significant size (top 10% of companies) that would take years to reach, if ever, starting from scratch. A very tiny % of startups ever exceed $1M/yr in revenue, meanwhile hundreds of business above that level are for sale right now.
due to the aging Baby Boomer demographic that still owns a lot of enterprises, there is a tremendous amount of wealth that needs to change hands in the next decade thus creating a great opportunity for the business buyer. And not every business has a family succession plan.
In addition to his book, Mr. Deibel also holds classes and workshops to directly help aspiring business owners down the path of successfully buying an existing business. Check out his material.
Here at Kirksley Commercial Finance, we'd like to see as many successful businesses that are available for sale transfer into the hands of the next generation of capable owners. This activity, if done right, will help keep small and medium businesses, and thus the entire US economy, vibrant which in turn helps keep local communities healthy and happy with a bright future.
If you are interested in buying a business, you will likely need the help of a professional financing expert that can correctly analyze your financial situation and assess the prospective business under consideration. We can help you find the best financing solution for your business acquisition so that it gets off to the right start. You may not qualify for a typical SBA loan through a traditional bank but even if you do, our network of SBA lenders are preferred partners and offer the best terms at the fastest speed to close for customers that may or may not be able to find bank financing for the purchase. Please review our Business Acquisition information and contact us for a free consultation on what is possible in terms of financing the purchase of a currently operating business.