Autumn has always been a time of new beginnings for me. Maybe it’s my Semetic upbringing because the Jewish New Year begins in the fall. More likely it signals new school clothes and moving up to the next grade. Possibly it’s the years I spent in retail when Labor Day signaled the end of tourist season and the time to place orders for the holidays.
In the Jewish tradition, autumn is a time to put your house in order, re-evaluate your life and make adjustments. It’s also a great time to start a business or add additional profit centers to your existing business.
The cooler weather and falling leaves energize me and inspire me to add new programs to my business.
Do you also find yourself thinking this is the time to start up something new or make changes? Does the fall get you motivated to step up to your dreams and make those ideas take shape? Are you ready to finally do what it takes to make your business more meaningful and more profitable? The best ROI you’ll ever realize is when you invest in yourself and in your dreams.
Because I want to see you finally dive in and get your business rolling, I am again offering my Idea Generator Package this fall. Until the spots fill, I am offering a three session bundle for $270 (less than half of what it costs to purchase three phone consultations separately. ) These calls can be used to discover what kind of business you can start or to generate ideas for more revenue in your business. Click HERE for more info.
Have you been considering purchasing an existing business but not sure you should spend the money when you could start your own? It’s important to weigh many factors before you decide if it makes sense to buy or start from scratch.
For years I’ve bucked the adage “don’t re-invent the wheel” because I believe some of the most creative and inspired ideas and businesses are a result of doing it differently, putting your own spin on an existing concept. If you find an existing business that you love and that has a sound track record of profit, ask yourself the following questions:
- How could I take this idea and make it even better?
- Is this business missing a demographic that I could target with a similar model if I tweak it or add something to it?
- Do I like the service or product they offer but not the location?
- Would this concept or model work with a different product?
Here’s an example:
Last week, I spotted a unique business in the parking lot of the community swimming pool. A young man was making crepes on the back of a cool little teardrop-shaped trailer. Of course, I had to interrogate him as I always do when I discover a business I haven’t seen before. I learned that he sets up every Thursday in the summer at this location and at a different location every day of the week. He takes his portable creperie to local soccer games and other community events.
As I continued my walk, I thought of other items this concept could be applied to and taken to various locations where the ideal customers gather. The list of products someone could peddle this way is endless: candy, ice cream and even non-food products. OR, what if you loved the idea of starting a crepes business but not moving a trailer to a different location every day? Could you set up on a college campus permanently?
If you spotted this business on vacation and loved the idea, you might consider duplicating in your own community. Do you know enough or could you research and learn about it to start up on your own or would it make sense to approach the entrepreneur who’s already doing this about hiring him as a consultant to help you start your own traveling crepe cart? Or purchase recipes from him?
While I generally encourage people to start their own business, there are times when it makes sense to purchase an existing business.
Years ago, my partner and I sold our home furnishings business to our controller. Since he had all the inside information about vendors, advertising, employees and the systems of the business, he probably could have started from scratch, particularly since that business was not dependent on repeat customers. He chose instead to purchase the existing business because we had ideal locations and all the suppliers, vendors and personnel in place, saving him a lot of time which meant he could immediately begin earning.
If you’re considering starting a personal service business, it might be best to start from scratch. When I decided to discontinue bodywork, it would have been foolish for another therapist to purchase the practice because I WAS the business. My clients liked my style and may have been unhappy with the work of another therapist. The same would hold true for some other very personal services like hairstylist or aesthetician. It is possible to profit from your knowledge, however, when you are ready to close a business that isn’t really salable and I’ll address that in a future post.
So, when does it make sense to buy rather than start up on your own?
The couple who purchased my contemporary craft gallery made a wise choice to buy rather than start from scratch because I had a favorable lease on a building in an ideal location which was a valuable asset in that community. I had also established strong relationships and exclusive agreements with artist and vendors. I’d already figured out what works and doesn’t so they benefited from my early mistakes which saved them a lot of money. The gallery had a loyal following with locals and was a destination for tourists. All of those factors made it a wise choice for this couple to purchase rather than start a business on their own.
If you’re not sure whether to purchase an existing business or start your own, ask yourself these questions about any business you are considering.
- Does it have an established loyal following or clientele?
- Is the location ideal or would you be able to start-up in a better spot?
- Are there a number of years left on the existing lease and is it transferable to a new owner?
- Does the seller have exclusive agreements with vendors or sources?
- How much time would it take before you would be able to generate income if you started up on your own?
- Does the existing business have a strong reputation in the community?
- Does the market warrant another like business?
What if you spot a business you love but want to open your own in a different location? I’ll address that in a future post.
In the previous post, we talked about why bigger isn’t always better. Here I want to address a related issue that keeps cropping up in conversations with new and aspiring entrepreneurs.
There seems to be a lot of buzz these days about starting your business with your “escape” in mind and I think it scares many would-be entrepreneurs because they think they have to create this machine that can function without them.
For some people, this is a great idea, but to me, it gives the same message as Tim Ferris’s “4 Hour Workweek”-that work is not fun and is something to just get over with as quickly as possible so that we can get on with the business of life. Well, that seems counter-intuitive to the flavor of creating work you love. If the purpose of starting a business is to set yourself up to stop working, then, yes, it makes sense to create a business that can run itself without you. But what about those of us who don’t even consider retirement and want to share our special gift with the world or those who want to create income out of interests and enjoy our work?
Whether you’re employed at a job that’s a poor fit or you are out of work, you are likely considering some kind of a career change. That can either mean looking for another job or starting or purchasing a business. Unless you’re just putting in time until you can retire, you probably want to do something that has meaning to you and in this economic climate, finding that perfect job is even more difficult.
Not everyone who wants to start a business aspires to be a mega tycoon. Many people just want to escape a job that’s unsatisfying and find a livelihood that pays well and is enjoyable. If you fall into the second category, it’s best to tune out a lot of the chatter about starting a business not a job for yourself because your dream job would likely be one where you work where you want, with whom you want and do the kind of work you love. Well, if it’s your business, you get to choose where you work and who you work with and what kind of work you do because you have a great boss-YOU. You choose your benefits package and the type of retirement investing you want to do and you can design an exit plan that keeps paying you if you at some point decide to stop working.
Not only is there nothing wrong with creating a job for yourself, or in some cases “buying yourself a job”, it’s a damn good solution.
In future posts, we’ll address when buying yourself a job makes sense and how you can continue to earn should you ever decide to slow down.
We’ve all heard the advise “Work on your business, not in your business. Leveraging is the key to growing your business. Get your business to the point where it can work without you.” In some cases that is good advise but often it’s not.
Yes, leveraging can mean you have some passive income or that you can produce more revenue than you could on your own but bigger does not always mean more money, more free time or more satisfaction.
Some aspiring entrepreneurs have a goal of growing a large business and hanging out on a tropical island while employees run it, but chances are you are going to spend a lot of your time in an office planning, directing and delegating. Is that what you ultimately want your life to look like?
Let’s say you are a custom cabinet maker. If you started your business because you love doing that kind of work with your hands and get satisfaction out of taking the project from design to completion, are you going to be happy doing the work to drum up clients, hiring other cabinet makers, ordering materials, keeping track of payables and receivables and handling payroll? Probably not.
In some circumstances keeping it small is a smart choice. Maybe you don’t want to deal with the administrative side of overseeing a large business. Perhaps you thrive on the actual service you perform or customer interaction. Sometimes growing large can be so costly with payroll taxes, worker’s compensation insurance, remote office rental, etc, that your net profit isn’t much greater than staying small and keeping your costs and quality of service under control.
Years ago after finishing massage school, I intended to open my own body-work center and hire other therapists to work for me for a percentage of the revenue. I’d had other businesses and knew the administrative load involved. To get practical experience in the spa industry, I subcontracted to a few resorts and what I discovered was that while I was comfortable with and good at the work involved in marketing and running a business, what I really loved was the hands on healing work with the client. I didn’t want to give that up in the interest of building a large business.
In the home furnishings business, however, I found I enjoyed the marketing and administrative side more than customer interaction so running a larger business made sense. However, there was a point at which rapid expansion proved less profitable because we grew faster than we could manage.
When I opened a contemporary craft gallery, I loved the face-to-face client contact and knew that I needed to out there with customers to learn their preference. I also needed to do the buying and attend trade shows to keep up on trends. I didn’t want to be behind a desk doing paperwork so I delegated the book-keeping. Even though I loved working in the business, I also wanted and needed some free time for other activities I love like walking on the boardwalk, in the redwoods and traveling. Some small business owners will just close up shop a day or two to have time off but I wanted to be open seven days a week so I opted to hire additional exployees to work the gallery and have money coming in even if I was away. For me, that was the perfect mix of hands-on and delegating. When I was encouraged to expand and add other locations, I knew that wouldn’t fit the lifestyle I was looking for at the time.
Before making the decision to expand your business, ask yourself what aspects of the business truly excite you and which tasks you prefer to avoid. If being out doing the actual service is most satisfying to you, it probably isn’t going to make you happy to have other employees or contractors doing the work and sitting back directing. You may be happier for the long run doing the work yourself and having an administrative person handling the appointment scheduling, phone calls and paperwork. Every entrepreneur has to find her own comfortable balance so don’t assume bigger is always best.