This article is written as the ultimate guide to buying a business in hopes of encouraging entrepreneurship while exploring many of the often overlooked possibilities and pitfalls of buying a business. America is built upon millions and millions of entrepreneurial stories of women and men just like yourself that dreamed of starting or buying their own business.
We have also written a free eBook for first-time business buyers.The total expenditure numbers are based on BizBuySell.com and U.S. governmental data, which indicate roughly 500,000 businesses change hands each year.
Buying an existing business is so prevalent because it lets you omit the risks and costs of launching a startup business. The journey of finding the right business can be extensive and problematic.
As you begin this journey, I am hopeful that this article will help guide you, challenge a few misconceptions, encourage your dreams and help make business ownership a dream come true.
Remember that buying an existing business has one huge benefit by allowing you to receive a paycheck on day one of ownership.
Calvin Coolidge once said, “The business of the American people is business”.For centuries people have scratched and clawed their way to America for the opportunity that this country presented to them.
Individuals like Benjamin Franklin, P.T. Barnum or Katharine Graham had incredible dreams and ambition that led them to start or lead profitable businesses in our great country.
From the colonial era to the present day, small businesses have been an integral part of American life. Blacksmiths, farmers, seamstress, saloon owners, doctors, and even the traveling tonic salesmen were all part of our colonial legacy.
Eventually, our news traveled of great opportunities that awaited out west and Americans loaded up their wagons and headed west risking all that they own for a dream of freedom, more land, gold or better provision for their families.
According to Entrepreneur.com, there are 550,000 new entrepreneurs each month in the U.S. This translates into 6,600,000 new business buyers or business launchers each year in America. Please reread the last two sentences and let these numbers sink in.
Many individuals that are considering buying a business feel that they are alone but they aren’t alone.
There are now more older entrepreneurs than before. The rate of new entrepreneurs ages 55 to 64 increased from 14.8 percent in 1996 to 24.3 percent in 2015. Women and Latinos are also major drivers in the entrepreneurial boom as their numbers skyrocket.
In 1973 there was only one female of a fortune 500 Company in the U.S. Today, things have changed as women lead some of the highest revenue companies in the U.S.
Marissa Mayer – CEO of Yahoo - $42.1 million a year
Martine Rothblatt – CEO of United Therapeutics – $31.6 million a year
Carol Meyrowitz – CEO of TJX Companies - $23.3 million a yearMeg Whitman – CEO of Hewett-Packard - $19.6 million a year
Indra Nooyi – CEO of Pepsico - $19.1 million a year
Under Katharine Graham’s leadership, the Washington Post grew a hundred million dollar company to $1.4 billion by 1991. Washington Post’s stock value soared from $6.50 a share to $222 a share by 1991.
What is the impact of women throughout the U.S. regarding small business entrepreneurship? According to the data from the Small Business Administration:
· Women-owned businesses employ over 8.4 million workers and generate $264 billion in payroll.
· Almost all (99.9%) of women-owned businesses are considered small businesses (fewer than 500 employees).
· 36 percent of all businesses are women-owned, and they account for 12 percent of all sales and 15 percent of employment.
· An additional 2.5 million businesses are owned equally by women and men.
These businesses account for an added $189 billion in payroll for 6.5 million workers.· As the majority and joint business owners, women entrepreneurs generate $2.5 trillion in sales.
It’s important to note that women aren’t satisfied any longer with just being employed. Women are starting businesses and buying businesses and when needed they are hiring men;)
In 2012, women were majority owners of 9.9 million businesses. These businesses generate $1.4 trillion in sales and employed over 8.4 million individuals each year.
Additionally, another 2.5 million businesses were equally owned by women and men. These businesses account for another $1.1 trillion in sales and 6.5 million jobs annually. As a majority and joint business owners, women entrepreneurs generated $453 billion in payroll for 14.9 million workers through over 12.3 million businesses each year.
Do you have a mentor or a trusted friend? If so, you are way ahead of most individuals looking to buy a business. There is something powerful about the spoken word.
Once words leave our mouths they take wings and often become realities. A great place for a dreamer to begin is by sitting down and telling someone what they are thinking. Also, remember to just your first conversation carefully as dreams in their infancy are fragile and they need to be protected and nourished.
The reason I mentioned a mentor or a trusted friend is that you need someone that will be 100% honest as well. A trusted friend will tell you the truth no matter what and although it may be painful the truth is needed.
When we are considering buying a business we all bring history, education, experiences, baggage, successes, and failures to the table. All of these things add to our maturity and gives us a greater perspective.
During this dream phase, it is quite okay to dream and I mean dream. Without dreaming big we all should stay in the corporate rat race and keep the status quo.
Remember that it is individuals like the Wright Brothers that help all of us dare the impossible. Remember that it was these two bike shop owners that discovered flight working after hours and weekends with NO budget, NO loan, No instruction manuals with everyone calling them crazy.
Buying or selling a business has never been easier. If you want to relocate to a new area and buy a business you can. If you need help financially, there are many places to find help. If you don’t want to start from scratch you can buy a proven model called a franchise.
If you want to consider all of your options there are many ways to explore. Today, you have professional business brokers that will walk you through the entire process.
Permit yourself to explore. Exploring costs you very little or nothing at all but it allows you to match your know-how to your passion. Not everyone buys a business to make millions of dollars. Some buy businesses to help others, meet unmet needs or serve a community.
These are all noble reasons but remember that the business that you buy must pat the bills or you will quickly be out of business. In the end, your business must produce a livable wage for it and you to continue.
Raleigh Business For Sale