If you’re thinking about making the leap into entrepreneurship in 2024 — congratulations! The world needs more entrepreneurs, and I believe running a small business is the most rewarding career path.
To help you get going, here's my brief rundown exploring 3 basic options to get into a business of your own:
1. Start from scratch.
2. Buy an existing business.
3. Open a franchise.
While some people like the romance of building a business from nothing, others may prefer a more efficient route and opt to buy an existing business. Here's a closer look at each option.
Starting up from scratch
Building up a business from nothing is the typical approach for first-time entrepreneurs looking to get into business without spending too much money upfront. This the most popular start-up path.
While it's incredibly rewarding to start a business from scratch, you'll be learning as you go and will naturally make mistakes along the way (like every other new entrepreneur). And it can take two to three years to achieve profitability because you’ll be working out the kinks in your new business — such as perfecting your product or service offer.
Other self-employment options worth mentioning are freelance and gig-economy opportunities.
Unlike buying a business that’s already making money, or opening a franchise which has built-in systems, as a start-up you’ll have to develop your own operations, build your own brand, and convince customers to buy from you.
Buy an existing business
If the idea of starting a business from scratch seems too risky and time consuming, but you like the idea of business ownership, then consider buying an existing company.
An existing business that interests you may be for sale in your area — or you could approach a business owner to see if they want to sell.
Similar to Auto Trader, there are platforms listing businesses for sale by the owners such as Business Exchange.
Benefits of buying a business include stepping into an already operational business that has employees, customers, and cash flow. However, you may need to come up with a larger amount of upfront money than you might spend on building a business from scratch.
To buy a business, your best bet is to find a small business that’s been around long enough to achieve profitability. When assessing an opportunity, conduct due diligence by asking to review three to five years of financial records and tax returns — an accountant, lawyer, or business broker can help you with this process.
Open a franchise
Franchises offer entrepreneurs a known brand and a proven operating system. You’ll also enjoy support from the franchisor who has both a strategic and financial interest in seeing you succeed.
There's a franchise opportunity out there for almost any budget — but, if you don't like the idea of shelling out approximately $2.3million to open a McDonalds restaurant, you may prefer the more modest cost of about $80,000 to open a Liberty Tax office.
At the time of this writing, there are over 750,000 franchises in the United States and over 76,000 franchise units across Canada.
Franchises have strong appeal for would-be business owners. You can get up and running with an initial licensing fee as low as $10,000. With proven business systems, solid branding, and franchisor support, this type of business opportunity has a better than average chance of success.
Of course, before you pursue any new venture, it’s important to do your own market research and conduct due diligence to verify claims made by the franchisor. That's why it's best to work with an independent franchise consultant such as my colleague Gary Prenevost at FranNet.
Is there room in the market for you?
No matter which business option you choose, it’s essential to take an unemotional look at the marketplace to answer the question: is there a place for you?
You can answer that question by performing extensive market research. That should involve checking competitors, talking to potential customers, identifying industry trends, checking into government regulations, contacting potential suppliers, and writing a business plan.
Remember — fortune favours the prepared mind! Reach out to me anytime for any help with your journey.