“I’m tired of corporate America,” she said. “I want to be my own boss. I saved for years and my family obligations are less than ever. Now’s the time!” But is she sufficiently prepared? Research, personality, experience and passion result in success. After careful introspection, which way will you start a business?
The three most common ways to start a business are 1) Buy an existing business. 2) Buy a franchise. or 3) Establish a start-up.
Everyone yearns for his or her own business occasionally, but careful research is essential. First, you must look at your personality. How is your ability to take risks? Who are your role models? Who will support your emotional needs? Once you establish you want to move forward, you’ll need money to invest for these three options.
Buy a Business
Since buying a business requires financial risk, you may have long hours in planning to locate money for your adventure. Find a business broker with great credentials.
Business brokers assist you with difficult decisions. If you are in Texas, begin by looking online at Texas Association of Business Brokers, a non-profit agency with a tight grip on maintaining the integrity of the industry. A list of business brokers is available, but personal referrals may assist with your discovery.
Recently I met with Chitra Gupta to hear how she started her commercial real estate business. She’s exited corporate America a little over ten years ago and never looked back. Check her website at http://www.cgaworldwide.com/ for a sample of properties.
Franchises
If you want a safer path to business ownership, consider a franchise. Ways to finance a franchise exist, rather than risking your life savings and borrowing from your 80-year-old grandmother.
Dave Omholt of the Entrepreneur Authority, offers a monthly seminar to help you decide what fits you best when becoming a business owner. The next free seminar is February 21 from 1:30-2:30. People can register by going to http://eAuth.com/upcoming-e-
Start-Ups
If you want to build a product or service, which takes a large investment, you’ll need detailed documentation with significant time for growing the start-up. Trying to find investors is a different ballgame for a start-up.
Since I recruited for start-ups in the past, I know that extraordinary leadership and good hiring is not always a guarantee for success. Start-up leaders require an abundance of confidence, good stomachs for surprises, big feet for kicking butt, and diplomacy with their Board of Directors. Start-ups are fast-paced with little structure. Even a start-up with a fabulous product, going gangbusters, can fail with the loss of funding. In other words, you must be a little crazy, and profoundly smart!
Statistics
You’ll definitely need to spend time examining the statistics before you invest your time and money in any business. Are you a calculated risk taker?
Failure rate it high but security is difficult to find anywhere. How have you managed failure in the past? How badly do you want to be an entrepreneur? Is it time for you to move forward with the idea?
List of Best and Worst after 5 Years –from http://www.statisticbrain.com/startup-failure-by-industry/
| Businesses with Best Rate of Success After Fifth Year | |
| 1 | Religious Organizations |
| 2 | Apartment Building Operators |
| 3 | Vegetable Crop Productions |
| 4 | Offices & Clinics of Medical Doctors |
| 5 | Child Day Care Services |
| Business with Worst Rate of Success After Fifth Year | |
| 1 | Plumbing, Heating, Air Conditioning |
| 2 | Single-Family Housing Construction |
| 3 | Grocery Stores |
| 4 | Eating Places |
| 5 | Security Brokers and Dealers |
| 6 | Local Trucking |
We must plan for the next step in our career and life planning. Will one of these three ways fit you?
In next week’s article, I’ll give you more insight into several ways to start a business with much less financial risk. Additionally, I’ll give you a short list of local resources.