To become the owner of a company you need to either build your own from scratch or buy an existing business. If you go the second route, you’ll also have the choice between running it ‘as is’ or changing some of it and creating a new company using its assets. This all sounds simple, right?
Unfortunately, once you get deeper into it, the matter gets much more complicated. You’ll need to evaluate your options, ideas, resources, and even drive with extreme care. Becoming the owner of a business is a challenge no matter which route you take. Millions of people think about starting their business but never take the risk because they seek the security of steady income (84%) or worry because the odds of success seem low to them (66%). I can understand those worries and have experienced them myself. So, today I’ll try to put some of them to rest by offering you some helpful info on how you can reduce the risks of becoming a company owner.
Become the Owner of a Company Route 1: Buy a Business
This is the least risky route and the one that will require minimal effort on your part. You simply need to survey available businesses for sale, shortlist the ones that are most interesting to you, evaluate them, choose one, and make a purchase.
You’ll need a substantial capital to do this, but financing will be easier to obtain as you’ll have a well-performing business to show prospective lenders. Add a solid business plan with some minor improvements and you’ll have the needed money ass the risks will be minimal.
If you want to become the owner of a business this way you should look at the offers at:
Of course if you aspire to become the owner of a company that brings you profit, you’ll need to evaluate the options really well. You will also need to have a business plan for managing it in the future. That one will be necessary to get financing as well as to ensure the business doesn’t fail because of a change in ownership.
When evaluating the options, consider all factors that effect business performance. This means evaluating the business itself and studying its books with extreme care. However, this also means researching the market and predicting its developments. The most important question here is ‘will the business continue to be profitable?’
Even if you don’t plan to make a complete overhaul of the business (for that see the next paragraph) you’ll need to plan for improvements. You might also consider rebranding if you already have or want to establish a recognized brand of your own. If the business you purchase has a good local reputation, changing its name and individual peculiarities might damage its performance. So assess the situation from every angle and choose wisely.
Become the Owner of a Business Route 2: Buy Assets of a Business
This route is virtually the same as the previous one. The difference is that you don’t need to search for a stable and profitable business to buy. In fact, you should be focusing on floundering companies on the verge or in the process of going bankrupt. This way you will get a much lower price.
The things to look for in this case are the assets you need to start your own business. This is a halfway solution between buying a business and building your own. Choose it when the possible deal can cut the costs of creating your company from scratch. For example, buy a failing restaurant that has a great lease that will give you a chance to open a store in a prime location. Opening a different kind of restaurant will work as well. The point is that by making this deal you do not become the owner of a company that already exists. You buy the part of it that will help you build a company you want to establish.
To give you some idea of how flexible this option can be think of a case like this:
You have a great idea of making a completely new kind of energy drink that will combine an already existing drink with some extra additions. You buy a company that makes those drinks (all rights and patents included) and only invest in adding the extra step to the production process. Hence, you get a brand new startup that’s not really all that new.
Become the Owner of a Company Route 3: Start from Scratch
This route is the most challenging as building a business from scratch requires more time and has exponentially more risks involved. I strongly suggest choosing this option if you have an original idea. In this case, use one of these plans (or one of the hundreds of books on the subject):
- Starting A Small Business (Investopedia)
- How to Start a Business: A Step-by-Step Guide (Business News Daily)
You might think that despite the difficulties this way is the most rewarding. But let me be clear, being a successful business owner is rewarding no matter how you obtained that company. Yes, you might get a higher level of emotional satisfaction because you’ve built it with your own hands. However, this won’t be much of a consolation if you don’t succeed.
If you become the owner of a business this way, the first challenge you’ll face will be making the decision to take the risk. This is sure to be hard with the Internet full of attention-grabbing statistics like ‘90% of new startups fail’.
Do not panic and read this debunking of startup failure statistics instead.
So, if you want to become the owner of a company by building it from scratch and have resources and drive to do it, you should! Evaluate the risks, research the market, develop your business plan, get financing, and proceed. While you’re at it, do not forget that the most common reasons for small business failure are ‘running out of cash’ and ‘not having a market for their product’. Protect your company from both by thorough planning and you’ll cut down the risks of starting your own venture.