Do you have a great idea that is just begging to be made into a business? Is your business thought so unique it can’t fail? Will your way of thinking revolutionize the industry? All this might be true but is this enough to warrant starting a new business? Have you presented your ideas only to find that it wasn’t as easy to find funding as you thought it would be? Here’s another way of doing it. People want what they know and you don’t have the time or money to teach them otherwise. You’re not Apple!
Starting a business is tough. Most people underestimate how long it will take to get their business off the ground and inevitable will be grossly underfunded. Starting the business as in renting a space, getting the equipment or whatever you need to run your new business, all that is the easy part. Even if your thought is to be a in the service sector and work out of your house with your cell phone, I’m here to tell you that even then it will be tough.
Starting a new business, you have no customers; zero. This is the problem. Most of the time, entrepreneurs grossly underestimate the time it takes to build a customer base and simply run out of money before they get enough customers to even break even. Let alone make money. Buying an existing business will give you much better visibility over your options. You just might find out that your idea wouldn’t have worked but if it does, all the better!
Consider buying an existing business. There are thousands for sale and many will be closely related to the business you plan on starting. Buying an existing business has many advantages including the fact that there already is a customer base. There is an existing cash flow. Even simply things like a postal metering system, scales, installed machines, an office with a phone, etc. It is all already there. If you have a great idea, put together a business plan based on an existing business.
This way your lender lends against an existing cash flow as well as a proven business with assets, receivables and a track record. Your idea will then be an addition to the existing business to help propel it to greater heights. It would be incremental additional business but who knows, maybe your idea has already been tried and it didn’t work? As a rule, the more unique your idea or product, the more difficult it is to sell.
The issue is customers. With all the love in the world and renting yourself the shiniest, brightest office, you still do not have a single customer. This is where most businesses fail. Every business, new or old, lives by the graces of its customers. There is no exception to this rule. None. The issue is not that there is anything wrong with your intentions or your capability to get yourself situated.