Like all parents you probably discovered that caring for your children really is a full time job. While continuing in the work force is important and fulfilling for many working parents finding the flexibility to balance the competing demands on your time can be hard. If you are like me, you may have started wondering if being your own boss is a great alternative to the limited flexibility of a corporate career path.
Turns out we are not alone! 55% of American female entrepreneurs started their business in order to have a better work life balance, according to a recent PayPal Survey. Even though business owners on average work more hours than individuals in corporate roles, the ability to control your own schedule is a huge benefit for working parents. On top of that, new entrepreneurs report being happier and feeling a greater sense of optimism compared to those in traditional corporate business fields.
Although there is a growing sense of optimism linked with new entrepreneurship, many people are still worried about failure, and rightly so. Running a business isn’t easy. It never has been. According to Entrepreneur Magazine, 66% of small business owners report being stressed about the state of the economy, 44% believe the economy will get worse in the next 12 to 18 months, and 50% expect the economy to negatively impact their business in the year to come.
If you yearn for the flexibility of running your own business but worry about your ability to launch a new venture from scratch, you may want to consider entrepreneurship through acquisition. Here are three advantages to buying a business:
Proven track record
When considering which business to buy look for a company with a proven track record of success. If a business already has established customers who will continue using the businesses’s services you may be well positioned to continue to operate the business at it’s current state. While you might not make much money in the early days as you are paying down your initial investment of buying the business you will have a base on which to build your revenue and salary over time.
Finding funding to start a new business from scratch can be incredibly hard. Although everyone talks about crowdsourced funding from sources like Kickstarter and Angel Investors with people ready to invest in your dreams, the reality looks quite different. When starting a business from scratch most of us should plan on self-funding until you get initial user traction. This can be incredibly hard. In contrast if you are buying a business you should expect to pay 10% of the value in a down payment, 10% is often financed by the seller and they rest can typically be financed by a SBA backed loan. In either scenario it makes sense to do some basic financial planning before you become an entrepreneur. If you are able to pay for the company outright (it sounds crazy but isn’t depending on the business) you also have additional options from financing your company’s investments to expanding based on the business’s existing revenue or assets.
Training before you take the reins:
One of the great advantages of buying a business instead of starting from scratch is that someone already knows how to make it work and often they actually need you to succeed! Typically when you purchase an existing business you can negotiate a period of time that the owner will help you transition and learn the ropes. If the owner is unable to support you through the transition you may be able to retain long term employees of the company who know how to manage important aspects of the business. Once you have learned the ropes and feel comfortable managing the business as it is you can start to focus your efforts on growing your business.
There are pros and cons to both buying or building your own business. Depending on your personal situation, there may be more advantages to buying versus building, and vice versa. If entrepreneurship through acquisition piques your interest, consider taking some initial steps to familiarize yourself with the process of buying a company.
Guest Post: Jenny Feinburg of Cobelay
Jenny Feinberg is Co-Founder and CEO of Cobelay.com, an online marketplace that is streamlining the process to connect buyers and sellers of small businesses