This article is sponsored by Transworld Business Advisors
Owning your own business is a dream for many. But without proper planning and sound advice, the dream becomes a nightmare for many.
Many of the mistakes that lead to business failure are avoidable. But impatience, laziness, misguided assumptions, inexperience, and personality-business misalignment can all contribute to bad decision making and a failed business.
To help anyone thinking about buying a business in Frisco, we sat down with Tiffany Swartz of Transworld Business Advisors to find out what some of the most common mistakes are when buying a business and how to avoid them.
Mistake #5: Assuming that just because it’s a franchise it’s safe.
The franchise model is appealing because part of the business comes built in. Marketing, processes, branding, experience and more are often a part of the package. But Tiffany warns that not all franchises are created equal and knowing how to navigate the differences can be overwhelming.
Just because a franchise has brand recognition doesn’t mean it’s the right fit for you or the market you’re seeking to serve. Variables such as your personality, goals, finances, and experience will all come into play when deciding if a franchise it the right decision for you and if so, which one is the best fit.
Sadly, we’re not always the best judge when it comes to ourselves so working with a business broker who deals with franchises is your safest bet to find a good fit.
Mistake #4: Buying a startup as an absentee owner.
If you’re planning to buy a startup then plan to roll up your sleeves. The idea of buying and operating business and earning income from it without working in the business on day-to-day basis sounds appealing but it’s rarely the reality with startups. It’s also important to recognize that a lot of start-ups run loose in the beginning which can make placing a proper value on that business difficult. It’s might also mean hidden hazards.
If the start up game sounds exciting to you and you find one for sale that’s a fit, be sure to work with someone who will perform thorough due diligence and prepare to get your hands dirty.
Mistake #3: Not having the proper financing in place.
There are a lot of ways to finance a business. Some are very traditional while others are mind-boggling in their creativity. There is no “official” way to finance a business but it’s advisable to have the details of how you will finance your business sorted out before you get too far. It’s also important to have a clear picture of what you can afford.
Back of the napkin calculations won’t do it and there are a lot of small things that add up when buying a business. Even if you understand the numbers well it’s advisable to have a 3rd party advisor there to make sure you don’t get yourself into something that comes back to bite you later. The finance side of buying a business is a area that trips up professionals and first-time business owners so do your homework and get help.
A business advisor can help you make sense out of the financing options available to you.
Mistake #2: Getting into a bad lease.
Having an office or storefront of your own can be exciting, but Tiffany has seen many business struggle or go under because they got into a bad lease.
Bad leases are something that, in dealing with local businesses through Lifestyle Frisco, we have watched take down many beloved locations in Frisco.
Leasing business space is a different animal from the apartment leases and home loans many business owners have experience with. This is one area you definitely don’t want to navigate by yourself.
Mistake #1: Not engaging a 3rd party business advisor or broker.
This one might seem self serving but a good business broker will do a lot to ensure you get into the right business for you (yes, the good ones take your personality and lifestyle into consideration). They’ll also give you the best chance at success long term by getting off to a good start.
If the best athletes, business minds, and top-performing professionals have coaches, there is no reason you should buy a business without one.
By working with someone, you’ll take the emotional factor out of the equation and help your business get off to a great start. The process will be less stressful and you’re less likely to wind up in a business you hate instead of love.
We LOVE seeing new businesses open in Frisco. If you decide to take the plunge we’re here to see you succeed.
If you have questions about buying a business or franchise give Tiffany a call and make sure your business ownership dreams have a chance to become reality.