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Small business ownership is more popular than ever, but
the road to owning a business that fits your personality and goals can
be fraught with pitfalls if you're not fully prepared.
It's crucial not to underestimate the importance of
choosing the right business. Imagine trying to run a marathon wearing
running shoes that are three sizes too small. That's what it's like to
operate the wrong business. Your efforts will likely be doomed from the
start simply because you chose a business that doesn't match your
interests.
As long as you keep in mind some key points when
choosing a business, there's no reason to be discouraged. Thousands of
aspiring business owners turn their entrepreneurial dreams into a
reality every year. There are a variety of factors that go into the
business selection process and, believe it or not, most of them are
unrelated to the amount of capital you are able to invest in the
business.
Choosing the Right Type of Business
The intangibles involved in selecting an appropriate
industry and type of business can have an impact that lasts far beyond
your first day on the job. Personal interest and passion are non
negotiable elements in a successful business venture.
When the initial excitement of becoming a business
owner wears off, you'll be left with the task of actually doing the
work, day in and day out, for as long as you own the business. If the
kind of work your business does isn't very interesting to you, you're
setting yourself up for disappointment and frustration down the road.
A lot of new business owners begin the process by
conducting an honest assessment of their interests. In fact, the most
successful businesses often begin as a hobby which eventually inspires
the business buyer to transition into ownership.
Another intangible has to do with the owner's skill
set. Theoretically, it's possible to buy into a business in which you
have absolutely no skills or experience. The problem is that the
business may not be able to endure a lengthy learning curve. For
example, if someone with no previous skills in the salon industry buys
an existing hair salon with the intention of getting trained and
certified along the way, a major issue would be how the business would
survive while the owner learns the ropes. Would other employees fill the
gaps, or is it a better idea to work alongside someone else before
jumping into business ownership?
As you assess your interests, be realistic about
your skill level. If your chosen field or industry requires training,
factor it into your business plan from the start and make allowances to
compensate for your gradual integration into daily operations.
Identifying the Right Business Opportunity
After you have determined the type of business that appeals to you and that you would be truly happy owning, the next step is to look for specific businesses that fit the bill in your price range. Unless you have a large amount of cash at your disposal, you will need to finance a good share of the purchase price, so a visit to your banker or other financing professional is a prerequisite to beginning your search. The goal should be to understand how much you can afford to pay for a business, factoring in the amount you may be able to borrow from a bank, friends and family, or the business seller.
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