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If you're thinking of going into business for yourself, you may be wondering whether you'd be better off starting from scratch or buying a concern that already exists. While the success of any new enterprise is often a question mark, acquiring one of the pre-existing businesses for sale in Massachusetts may tilt the odds in your favor. Statistics show that a high percentage of completely new ventures will fail within the first five years. The purchase of a pre-existing entity will reduce the risk while opening up numerous opportunities for serious moneymaking.
This is so for a number of reasons. For one thing, a proven record of accomplishment often makes the established business easier to finance. For another, you'll be buying a recognized brand for which the previous owner has already performed marketing and networking chores. Such a business will probably have attracted a dependable customer base and developed satisfactory relationships with vendors.
Traditional or Franchise?
Those who think of purchasing an existing business have two options from which to choose: the independent operation and the franchise. Each has its good and bad points, and your chosen direction will have much to do with your goals and your personality.
There are those who prefer the ready-made aspect of buying into a franchise. They find comfort in having all operational details predetermined for them. The parent corporation will have already made the decisions and spelled out the rules. The franchisee need only follow them. Since the success of the entire conglomerate depends on that of its subordinate parts, support and training should always be there when needed. In some cases, however, the very fact that it is a franchise may limit its growth potential.
On the other hand, once you have purchased an existing business, it will be yours alone. You will have free reign to create, innovate and operate as you wish. Despite an often-higher purchase price, its established reputation should help to lower your operating costs, and potential for growth is infinite.
Channel Your Inner Sherlock
When purchasing an existing business, the mere fact that the nature of its being coincides with your own interests will never be enough. Unless you're doing this as a hobby, you'll also need to determine whether the enterprise will pay off in terms of income. Finding out for sure will take a bit of investigation. It is important to scrutinize the existing entity's current business plan; existing contracts with suppliers, clients, employees and contractors; and lease or property agreements.
In appraising an entity's overall value, the potential buyer must also consider its:
- Liabilities - When acquiring a heavily indebted business, the responsibility of covering these costs will fall directly on the buyer's shoulders.
- Sales patterns - A viable concern will have built up a strong client or customer base.
- Location - While an auto repair shop in the heart of the desert might be lucky to attract one or two customers a week, a hamburger hangout next door to a high school should do quite well indeed.
- Financial statements - If the seller cannot or will not provide at least three years' worth of information concerning sales and payroll taxes, loan agreements, disclosures and debt obligations, proceed at your own risk.
Anyone who contemplates purchasing an existing business should also scrutinize the length of its lease, the age of its equipment and the reliability of its workers. The analysis might additionally include any employment agreements, marketing considerations and need for compliance with governmental regulations.
Are You a Natural Entrepreneur?
Although not everyone is suited to business ownership, the possession of certain personality traits will assist in ensuring success. In general, the effective entrepreneur will be:
- Goal-oriented - Owning your own business requires a drive that pushes you to not only develop your own projects but also see them through to completion.
- Gregarious - A business owner will have to get along with many types of people, all of whom will have their own individual quirks. Vendors can be unreliable, clients demanding and customers cranky. A love of people in general will help you deal with them all.
- Decisive - As a small business owner, you will constantly be making decisions, and you'll often have to do it under pressure with no one around to help. If you're in the habit of second-guessing yourself, you might want to give your ownership dreams a second look as well.
- Organized - A large number of business failures can be traced right back to inadequate planning. The organized entrepreneur will keep clean records, stay on top of inventory and schedule production efforts down to the nth degree.
- Tireless - Many small business owners find themselves working seven days a week, and some of those days can last 12 hours or more.
- Driven - With the weight of the business directly on your shoulders, it's easy to wear down or burn out emotionally. Survival will often call for large degrees of motivation and stamina.
It's also vital to consider the effect of business ownership on your family. Loved ones may have trouble dealing with your long hours away from home, and a temporarily lower standard of living while the business gets off the ground could make things worse. It helps to know that those with whom you are closest will have your back.
The Massachusetts Small Business Community
In Massachusetts, about 86 percent of all firms employ fewer than 20 workers. To assist the growth of these small businesses, the state maintains an Office of Small Business & Entrepreneurship, or OSBE, through which it offers an advisory council, technical assistance grants and aid in development. In addition, the Massachusetts Small Business Development Center provides both existing and prospective concerns with advice concerning marketing, operations, financing, growth and strategic operations.
The Massachusetts Small Business Purchasing Program
Those who are interested in businesses for sale in Massachusetts might also consider investigating its Small Business Purchasing Program, or SBPP. To be eligible, the entity must:
- Have been doing business in Massachusetts for one year or more.
- Employ the equivalent of 50 or fewer full-time workers.
- Have a three-year gross revenue average of $15 million or less.
Either for-profit or nonprofit entities may apply. Participating businesses will benefit from the ability to contract with targeted executive procurement departments for non-construction goods and services. All will also receive free training, a subscription to COMMBUYS, placement in a searchable business directory and the assistance of the SBPP's comprehensive network of recruiters, mentors, advocates and liaisons.
For the aspiring business owner, buying one of the existing businesses for sale in Massachusetts will always be safer than starting from scratch. The original owner will have already gotten the startup chores out of the way. In addition to having instituted operating procedures and policies, he will also have established a reputation and customer base. With easier financing, existing equipment and experienced workers already in place, the aspiring entrepreneur who wants to hit the ground running may find it the best way to start.