Small Business Survival Guide By Jenna Kutcher
Even though excellent software is available to help you do this yourself with at most a little bit of professional help, it can be a time-draining diversion from running the business. If location is important for your brand-new business—for instance, if you want to be in the high-visibility, high-traffic location—you’ll possess to spend time plus exert effort in obtaining the perfect place to lease. Then comes the task of negotiating a beneficial lease, and possibly the cost of renovating the property to suit your requirements. If there’s a current company that has made an inexpensive or offbeat location function, you’ll probably find this particular impossible to replicate. Falling into the great unfamiliar carries greater risk compared to buying an existing company that has a great track record. At the particular beginning, you’ll be interesting in an experiment to find out if your concept will certainly work.
Many factors other than legal and financial concerns can and should influence your decision. You can often gain helpful insight by talking things through with your spouse or domestic partner—or perhaps a friend or relative who has owned a successful business. At each stage of the purchase process, you want time on your side.
The franchisor will probably help you find a suitable location and order the necessary equipment. And if you’re working with a good franchise, you can often count on the franchisor to offer advice if you run into a jam. Even though the list of negatives might seem long, through hard work and good fortune, you might find that starting a business from scratch will come closer to meeting your needs than the other means of becoming a business owner. You’ll have to set up bookkeeping and accounting systems. How difficult this is determined by your experience and comfort with tasks like this.
Also, you may have to send the franchisor a healthy share of your gross income each month. Franchise fees can often add up to more than 10% of the business’s gross monthly income. Typically, the franchisor will provide you with training and an operations manual.
Finding the right business to buy can take many months—or even a year or longer. If you try to rush the process, you’ll almost surely end up buying a substandard business or paying too much for a good one. And even after you’ve found the business of your dreams, you still face the meticulous work of investigating the business thoroughly and then negotiating the terms of your purchase. Again, if you act impulsively and without adequate preparation, you are likely to make costly mistakes. The vast majority of business owners, including those looking to sell their businesses, are honest people. Especially if you patiently and diligently investigate all aspects of the business, the chances are excellent that you’ll receive enough solid information to sensibly evaluate its prospects.
The business may have ongoing relationships and contracts with suppliers and vendors—perhaps on favorable terms. Often , you’ll be able to benefit from such contracts and not have to form new relationships, which can be a time-consuming ordeal. Franchisors take money from you in many, many ways, often making it very difficult for owners of even well-known franchises to turn a decent profit. In addition to the basic fee to buy the franchise, you may have to pay the franchisor for required equipment and supplies and for a portion of the advertising pool.
Still, there’s always the possibility that a shady seller will distort or withhold key facts. By following the suggestions in this book and consulting knowledgeable professionals before you buy, you can greatly diminish—but not eliminate—the chances of getting stung by a seller’s dishonesty. When you pay a substantial sum for an existing business, you are by definition putting a high value on someone else’s business concept. It follows that some of the thrill of creating something on your own will be missing. But it’s also true that you’ll be free to introduce your own good ideas to the already-successful business model over time. Or, put another way, you’ll have plenty of chances to make a good business better.