You have decided that you want to take greater control of your future, be your own boss, and become a first-time business owner. Finding the right business that speaks to you is not an easy task, however. Unless you are one of the lucky few that know exactly what you are great at and the industry to buy into, the following suggestive guide is a good place to start.
Play to your strengths
It may be tempting to jump on the next big trend or believe that by emulating another person’s success, your success will be guaranteed. Before doing that, understand that your strengths and your road to success may be very personal. Be prepared to be pushed out of your comfort zone and continually be learning something new. When starting out, it is always best to know what you are inherently good at and lean into them.
Do not confuse ‘strengths’ with ‘passion’. While strengths come naturally, passion consumes you with a desire to do it and do it well. Both are needed to succeed in business. You do not need skills to be passionate.
A good place to start is to understand your personal strengths. Taking one of the many free personality tests online can help you focus on what intrinsically drives you.
The more you know about yourself the greater clarity you can achieve in order to course your future path.
Know your limitations
In many cases, your limitation may be a financial one. You may have an amazing vision to turn a small business into a growing empire but if the cost exceeds your startup and seed money, it may simply be out of reach for the time being. While it’s fine to have your eyes open for a great opportunity, fully understanding what funds you have available to you will aid during your search.
There are many creative ways to finance your new enterprise, such as taking on additional partners, seller financing or taking a small business loan. You will also need to understand the running cost of an operation and ensure that you have enough funds to successfully operate the business after purchase.
Owning your own business can be incredibly rewarding. You will be working hard and learning new things every day. However, don’t expect to know everything and be comfortable reaching out for guidance. This is part of the experience. There is nothing wrong with admitting that you need assistance in getting to the next level. As Dianna Booker writes, every great leader has learned to ask for help.
Trust your passion (but verify)
Your passion is like your internal compass; it will lead you to where you want to be. In business, however, if you follow it blindly it can also lead you astray. Owning a small business can be challenging with long hours. You will need this passion to push through if you want to be successful.
If you have the opportunity, try working in the industry before buying into it. Getting experience will tell you if this is something you are truly interested in. It’s not surprising that if you don’t enjoy the work, it will be that much more difficult to run a successful enterprise in that industry.
Speaking with professionals in the same industry is another way to get a better lay of the land. Most small business owners are more than happy to discuss in detail the many aspects of running their business as long as they don’t see you as a competing threat. If you are unsure of what industry interests you, think about what product or services you currently use now that gets you excited.
Unless you are planning to run a business for the sheer joy of it, you will want to make sure the business you have chosen, the one you are passionate about, can turn a profit. Be sure to analyze your market and conduct a break-even analysis. Make sure that amount of revenue you bring in can cover the expenses of running the business. For example, how many muffins will you need to sell and at what price to cover salaries, rent, equipment, and production materials to break-even, or better yet, turn a profit?
What is your strategy?
Last, but certainly not least, what is your long-term plan for the company you want to purchase? Are you looking for lifelong employment, a stepping stone to other ventures, or do you want to find a small business and grow it into a large empire?
According to a 2017 BDC study, 61% of buyers are looking for a stable business versus 31% of buyers looking for a growing, profitable business. If you are looking for something to grow, you will need to do your due diligence accordingly on the industry that interests you. However, many people are looking for companies that will provide a comfortable living with a more suited work/life balance. Giving consideration to your exit strategy before purchasing will greatly influence they type of business you buy.
Owning your own small business can be an incredibly rewarding experience. It is also a major life decision. Performing your due diligence on the small business you select will be required but before then, you need to understand your own personal strengths, the passion you will carry forward into your venture and the constraints you have to work with before you can make your selection.