Getting Into Business for yourself doesn't necessarily require building a company from scratch. If the thought of navigating your way through the start-up process is holding you back, consider taking the entrepreneurial plunge a different way: Buy an existing business.
This alternative route to business ownership has some advantages worth considering. It allows you to bypass all the steps involved in creating a business infrastructure, because the original owner has already done that. You can take over an operation that's already generating cash flow and perhaps even profits. You'll have a history on which to build your forecasts, and a future that includes an established customer base. And there's generally less risk involved in buying an up-and-running operation than there is in creating a whole new company.
"When you buy a business, you're buying something you can touch, see, examine and evaluate," says David H. Troob, chairman of The Geneva Companies, a national mergers-and-acquisitions services firm in Irvine, California.
You're also buying something that's already producing a product or service, which is what motivated Roland Reems and Mike Nofsinger, co-owners of Moran Printing Co. in Orlando, Florida, to buy their company in 1978. The two had spent most of their working careers in the printing industry, so it made sense for them to buy a printing business. And with their industry connections, they had orders that needed to be filled right away.
Due to the equipment-intensive nature of the business, Reems estimates it could have taken as long as a year just to do the setup necessary to start a full-service printing company from scratch. Taking that time would have put them at a serious competitive disadvantage. "We needed to be immediate producers and providers, without losing momentum," Reems says. "We didn't need to remove ourselves from the marketplace for the time it would take to order presses and start a printing business from scratch."
Of course, there are drawbacks to buying a business. Though the actual dollar amounts involved depend on the size and type of business, it often takes more cash to buy an existing business than to start one yourself. When you buy a company's assets, you'll usually get stuck with at least some of its liabilities, too. Even so, you just might find the business you want is currently owned by someone else.
Why do people sell businesses--especially profitable ones? For a variety of reasons. Many entrepreneurs are happiest during the start-up and early growth stages of a company; once the business is running smoothly, they get bored and begin looking for something new. Other business owners may grow tired of the responsibility, or may be facing health problems or other personal issues that motivate them to sell their companies. In fact, some of the most successful entrepreneurs go into business with a solid plan for how they're going to get out when the time comes.
It's a good idea to at least consider buying a business as part of your early planning--especially if the appeal of being in business for yourself is in running the company rather than starting it.
Jacquelyn Lynn is a freelance business writer who has specialized in marketing and management issues for more than a decade.