The Blogger’s Guide to Buying Your First Business
So you’ve joined the entrepreneurial ranks as a blogger — a fine choice. If you’re ambitious, my guess is you’ve also considered starting up your own business (startups have so many options today), or perhaps even taking on a franchise. But what about buying an existing business?
Key Tips to Note When Buying Your First Business?
Getting a blog large enough to serve as a sole revenue stream is very challenging, while starting a more conventional business is a risky proposition. Some business experts believe that in today’s climate, buying an existing business is a safer and more effective route to becoming your own boss.
What’s more, it’s generally quicker and easier than starting from scratch. Of course, there will still be costs and a lot of work involved. The first step is to find the right business for you; one that matches your skills and interests.
Why buy a business?
Buying an existing business often makes a lot of sense. Rather than creating something completely new, you are instead taking on and revamping what someone else has already built. It’s like upcycling an old chest of drawers when you would otherwise have needed to learn carpentry, gather raw materials, and make one yourself. The bare bones are already there.
Let’s take a closer look at the specific pros and cons of this approach:
Pros of buying a business
Assuming you choose a well-designed business, a lot of the groundwork will have already been set out for you — there will already be a business and marketing plan, for instance. In addition, the existing sales history (with all the recorded details) will offer several things:
- A clear indication whether a market exists for the products or services on offer.
- An existing network of contacts and customers — possibly even employees.
- An easier route to borrowing money (if necessary) through showing operational viability.
Cons of buying a business
There will likely be a large upfront investment required, although the same could be said of a business you started yourself. There may be a greater need to employ advisors such as solicitors or accountants, though. What’s more, if a business is for sale, it may have been neglected for some time and need new life and energy breathing into it. Find out why the current owner is selling the business in the first place — it could be because it’s not profitable or has some other major flaw. If so, what can you do differently to turn that around? With your blogging to focus on, you wouldn’t have unlimited time to commit the project.
Selecting your industry
The first step of any budding business acquisition is to work out what kind of business you want to buy — and in what industry. You will want to do a lot of research into your options before going ahead. Start by visiting any trade magazines, newsletters, and online journals that interest you — you may know some from having written guest posts for them. From here you can start to pinpoint the specific type of business you want to run.
At this point, you should also determine your ideal budget, size, location (if relevant), and turnover. If you need some guidance, you can reach out to your contacts in the blogging world. Since blogging is such a flexible activity, it’s extremely common for bloggers to have side businesses, and you should be able to get some useful pointers.
How to find businesses for sale?
Feeling ready to begin your search? Here are several ways to find businesses for sale:
Check classified ads.
Most local and national papers will have ‘businesses for sale’ categories in their classified ad sections, so be sure to peruse the listings.
Call local CPAs.
It’s a long shot, but it might be worth checking to see if your local CPAs have any clients interested in selling their businesses.
Search online via the Wall Street Journal.
com is one of the biggest online marketplaces for business acquisitions, and it’s accessible to individuals and business brokers alike.
Find a business broker.
If you want a little more help, you can hire a business broker in your area. To ensure they’re trustworthy, make sure they are a member of the International Business Brokers Association (IBBA).
Look at online businesses.
An online business can be just as lucrative an investment as a brick-and-mortar business — sometimes more. Through digital marketplaces, you can find a top business for sale and review its site structure to check that everything stands up to scrutiny. Website flipping is a very profitable endeavor for savvy digital entrepreneurs (just as house flipping can be for those in the real estate field) and you can make money off a website you buy while you’re doing it up.
Contact business owners yourself.
The direct route, but not always the best one. A business owner who is eager to sell may wilfully misrepresent their business in an effort to convince you or negotiate a higher sales price
The financial side
No one really likes to talk about finances, so we won’t talk about them for too long — but if you’ve decided to buy your own business, it’s a good idea to get your financial affairs together right away. At some point, it’s likely you’ll have to produce a personal financial statement, so look into your credit rating and make sure everything is as it should be.
How to choose your budget?
You should have a good idea before you begin of how much money you’re willing to invest in the venture — and don’t rely on any promises from friends or relatives here. It’s a waste of your time to shop around for businesses that will be flat-out unaffordable for you, however enticing they may look. Dream big, but keep your goals realistic. It might be worth sitting down to discuss your options with an SBA specialist who has experience in business loans for entrepreneurs.
If you decide to pursue website flipping, then start low when it comes to negotiating with sellers — but not unreasonably low. If they’re asking for $20k and you offer them $5k, you will more than likely be ignored or rejected. A good rule of thumb is to aim to secure the business for 70% of the asking price.
There’s so much more to learn about business options, but if your goal is to maintain the professional flexibility afforded by blogging in your other business endeavors, then buying an existing business you can tweak as you wish is an excellent choice.
Being a business owner brings great responsibility, but also potentially huge rewards. Get those contracts signed and your payment agreement in place, and you’ll be on your way to a new milestone in your entrepreneurial career.