ENTREPRENEURSHIP THROUGH ACQUISITION
A Reliable Alternative To Chasing Unicorns
What Is Entrepreneurship Through Acquisition? Your Guide to the Benefits
Have you heard of entrepreneurship through acquisition but are unsure of what this means? Click here to answer this and to learn why this is a great choice.
What is ETA?
Your guide to the benefits
Have you heard of entrepreneurship through acquisition but are unsure of what this means? Read through here to answer this and to learn why this is a great choice.
Entrepreneurship through acquisition
Many Americans are growing tired of working in corporate America. Here, they are spinning their wheels on a fixed salary and far too many hours. To make matters worse, their wages are barely increasing on a yearly basis.
Fed up, millions are responding to an entrepreneurial spirit and starting their own business. In fact, 27 million Americans are either starting or running a new business.
Pursuing an entrepreneurial opportunity is a wise decision. The profitability rate recently surged more than 25% in a single year.
Read on to learn about entrepreneurship through acquisition. Explore the benefits of acquiring an existing business over starting a new one.
What Are the Challenges of Starting a New Business?
Many entrepreneurs decide to start their own businesses. While some find success, this path is likely to see significant challenges.
The most obvious challenge to overcome is that you are starting from scratch. You do not enjoy the luxury of an existing brand.
There are no loyal customers or equipment to leverage off of. Also, policies and processes have yet to be developed.
You do not have existing employees or subject matter experts. Instead, an employee training program needs to be developed and provided to all new workers. There may be significant barriers to entry in the marketplace including established competitors.
What Are the Benefits of Entrepreneurship Through Acquisition?
Entrepreneurship through acquisition occurs when buyer(s) purchase an existing business. This includes pursuing franchising opportunities.
In this scenario, an entrepreneur finds a business for sale and pays a price to acquire it. This may come in the form of a lifelong small business owner who is retiring and looking to sell.
There are many benefits to this approach because the transaction may include many different items. For example, you may be acquiring the company’s machinery and supplies. Perhaps the company has popular social media accounts that you will take control of on day one.
Perhaps the greatest benefit is that an existing business has an established revenue stream. You do not have to stress over generating profit as it will be coming in from the start.
How Do Entrepreneurs Find an Existing Business?
Once you decide to forgo starting a new business from scratch, it is time to find an existing business. However, this is easier said than done. Businesses do not typically put up a for-sale sign on the storefront.
The good news is that there are online resources to pair entrepreneurs with business owners looking to sell. There are algorithms that help match your passions with existing businesses and franchise opportunities. Once financing is secured, you can get a business appraised and make an offer.
Glance through featured businesses for sale listed recently on BizNexus Marketplace
Wrapping It Up
The American Dream is alive and well. Now is the time to seize your opportunity and become your own boss.
Instead of working uphill with a brand new business, you should consider purchasing an existing business. This way, you can inherit an established brand and revenue stream.
If you want to learn more about entrepreneurship through acquisition, you can start your search for the next business opportunity by signing up to BizNexus.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to Buy a Franchise: 5 Best Practices for Buying a New Franchise Opportunity
There's a lot that goes into investing in a new franchise. If you want to learn how to buy a franchise, check out some of these best practices.
How to Buy a Franchise?
5 best practices for buying a new franchise opportunity
There's a lot that goes into investing in a new franchise. If you want to learn how to buy a franchise, check out some of these best practices.
How to buy a franchise
Wondering how to buy a franchise?
Trying to decide if a new franchise opportunity is a good choice for you?
If you're starting a new business, buying a franchise is one of the best options available. It can be less risky than starting completely from scratch.
As opposed to buying an established franchise opportunity, becoming a part of a new franchise can be even better in some ways. However, there are a lot of things you'll need to think about to ensure you're making the right choice.
Below we'll tell you about the 5 best practices for how to buy a franchise.
1. Research the Franchisor Extensively
When you're thinking about buying a new franchise opportunity, it's important that you do plenty of research on the franchisor to make sure they're worth your time, effort, and money.
You should find out everything you can about the franchisor's history and track record as well as the people behind the scenes. You should also find out what you can about the franchisor's financial well-being to ensure that they'll have enough capital to help with your growth.
You should do some digging online to find out more about a franchisor. You may also want to speak to some of the current franchise owners as well.
2. Ask Questions
When thinking about buying a franchise opportunity it's important that you feel open to ask questions. If you have any concerns, bring them up.
You'll want to speak plainly with the franchisor to find out exactly what you can expect from working with them. Ask as many questions as necessary to find out what you can about marketing methods, training tools, technology, operations, and provided support going forward.
3. Be Ready For Legalese
When thinking about joining a franchise, you should also be fully prepared for looking over the franchise disclosure document. You'll want to review it carefully to ensure that you understand exactly what your legal responsibilities and rights are.
If dissecting legal documents isn't your strong suit, you may want to hire a franchise attorney to help you look over it. While it will cost you to hire an attorney, it will be well worth it and can help you avoid big problems later on down the line.
4. Know Your Worth
One of the best practices for buying a new franchise opportunity is to remember that you have value. New franchisors don't hold all the chips and chances are that they need you just as much as you need them.
Because of this, you may have a bit more wiggle room when it comes to negotiating a franchise agreement and getting a deal that is right for you. New franchisors may be willing to work with you a bit more than an established franchise will, as long as they can still maintain the consistency of their franchise brand.
5. Understand Your Market
In addition to knowing everything you can about the franchisor, you also need to think carefully about the market at large.
Look at the trends locally and nationally and be realistic about whether you believe the franchise truly has a place in the marketplace. Look at your community as well as the economy and consider what your community's interests and needs are.
You need to be sure that the franchise you're considering will be appreciated. Don't just rely on wishful thinking or your own personal preferences when deciding to buy a new franchise.
How to Buy a Franchise With These Best Practices
If you're ready to be a business owner, buying a franchise can be a great place to start. However, while learning how to buy a franchise isn't hard, making a profitable choice is much more difficult. It's important that you remember these tips if you want to be confident that you're making the right decision with your purchase.
Ready to get started with buying a franchise? Click here to start looking for a new franchise opportunity now.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
New Franchise Opportunities: Choosing the Right One for You
With a plethora of advantages to starting a franchise, your only hurdle may be determining which new franchise opportunities to choose from.
New Franchise Opportunities
Choosing the right one for you.
With a plethora of advantages to starting a franchise, your only hurdle may be determining which new franchise opportunities to choose from.
New franchise opportunities
In 2017, there were a whopping 745,290 franchises in the United States.
Those with entrepreneurial minds who don't want to go out on a limb and create a completely new business may want to add theirs to the list. And if you're interested in new franchise opportunities, how do you choose which one is right for you?
In this blog post, we'll discuss how to choose the franchise you'll succeed with. Franchises are a better bet for investment due to the fact that they come with a well-known brand. While that's already on your side, your franchise also has a higher rate of success if you pick a franchise that works for you.
Read on for more tips and tricks for choosing the best franchise for you to invest in.
1. Choose a Brand You're Passionate About
You may see that a certain brand of franchises is booming at the moment, but they're selling something you don't really know much about. What's more, you may not even have an interest in what they're selling, but you see the opportunity as a way to make money.
Instead, resist the urge for a high turnover of profits immediately in order to invest in a franchise you have a passion for. You'll succeed in the long run if you're doing something you love, and working with a brand you can stand behind.
2. Buy a Franchise That Has Lots of Support for Its Business Owners
While you should never purchase a franchise not knowing anything about business, you should have a strong support system from corporate. Discuss whether they have a strong backing for their franchisees, and how much support they actually give them.
Don't go for a franchise that leaves business owners flailing and wondering what to do next without the hope of help.
3. Pick a Franchise with a Good Reputation Among Franchisees
When looking for your next business opportunity, you may have been crushed to find out that your favorite chain restaurant doesn't work well with franchisees. Or, you may have found out that they've had incidents in the past and many unhappy business owners.
Don't then decide to franchise with them because you're loyal to the brand. While you can still remain a consumer of the brand, you'll want to ensure that corporate works well with people like yourself.
4. Choose an Affordable Investment
Depending on which franchise you buy into, you'll have to choose a franchise opportunity that doesn't blow through your budget. As a business owner, you don't want to spend everything you've got on the franchise fee. You'll need to take this on board when choosing the right brand to work with.
Taking Advantage of New Franchise Opportunities
Opening up a franchise is a big decision, but it can be incredibly exciting, and you'll want as much information as possible when you're just beginning. Here are 8 things you should know before buying a franchise.
Check out BizNexus Blog, which is all about new franchise opportunities to help you make the leap from searching for an opportunity to being a business owner.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to use seller financing to buy a business in 2019
There are various ways to go about funding the purchase of a business. A strategic option would be to negotiate seller’s financing with the business seller to alleviate the burden of paying full price for the business upfront. In the U.S., about 60-90% of business sales involve seller financing. Before going through with the purchase, you need to thoroughly vet the business. Because owners rarely finance 100% of the purchase price, you might also need to find other sources of funding, such as a bank loan.
There are various ways to go about funding the purchase of a business. A strategic option would be to negotiate seller financing with the business seller to alleviate the burden of paying full price for the business upfront. Jessica Fialkovich, President of Transworld Business Advisers - Rocky Mountain explains how this works, particularly for small businesses.
In the U.S., about 60-90% of business sales involve seller financing. Before going through with the purchase, you need to thoroughly vet the business. Because owners rarely finance 100% of the purchase price, you might also need to find other sources of funding, such as a bank loan.
Once your business is up and running successfully, you might want to refinance so you are free and clear of the seller.
You can get up to $5,000,000 with an SBA loan, but you'll need a good credit score (680 or better), collateral, and at least a 10% down payment.
If you default, the owner might want to retain the power to take back the business within 60 days of you missing payment.
Helpful Resources:
Helpful Business Sites:
Why 2019 might be the best time in history to buy a new business
So if you’re considering a jump into entrepreneurship, -buying an existing small business is absolutely an option you should consider. In his article for business.com, Looking Ahead: Buying a Business in 2017, Bruce Hakutizwi states:
Buy A new business
Here is Why 2019 Might Be The Best Time
As we mentioned elsewhere, 2019 looks like it might shake out to be the best year in a decade to buy a business in the United States. There are a few big reasons for this:
Loans are accessible and still historically dirt-cheap.
First-time entrepreneurs have access to up to $5 million in SBA loans from the government to help finance a new business acquisition.
With small business owners set to skyrocket over the next 10 years, there’s rapidly increasing interest out there for buying and established, viable business.
New technology solutions continue to offer increasingly efficient ways to connect buyers and sellers of businesses and to identify the right professional for you to do so.
So if you’re considering a jump into entrepreneurship, -buying an existing small business is absolutely an option you should consider. In his article for business.com, Looking Ahead: Buying a Business in 2017, Bruce Hakutizwi states:
Depending on your business strategy, industry, location, and other factors, there are more reliable and willing funding opportunities available to entrepreneurs right now than ever before. Between low-interest traditional business loans, government grants and loans, and a striking volume of venture capital available from individual angel investors, large corporations, and established VC funds, it’s easier and faster than ever before to fund a promising new startup or the expansion of an existing business.
As opposed to the relative risk of a brand new startup, obtaining funds to purchase an already established and successful business is even easier. This is doubly true if you’re purchasing another business that naturally extends or expands your own existing company or expertise since you can likely prove to the lender you’re up to the task of making the acquisition profitable. -Bruce Hakutizwi.
Buying a new business can be an exciting, rewarding, and potentially life-changing experience for you and your family. Do your research before you choose any professional to help you with the process, and make sure you’re clear on expectations and compensation from the outset. And as always, we recommend you check the BizNexus Marketplace to help vet financial services professionals, and for any helpful reviews, ratings, or relevant content to help guide your way.
A few useful links if you’d like to dig deeper on the topic:
How to Buy an Existing Website: A Step-by-Step Guide. -Will Lipovsky
How to Find a Business Broker. -Entrepreneur
BizNexus -Learn More From Our YouTube Playlist:
Business Acquisition
Have you checked out our podcast?
The BizNexus Roundup
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.