Hey everyone, it’s Giuseppe! I talked to business expert David C. Barnett again. He’s smart and helps people with businesses. David wrote Franchise Warnings. He also wrote a new book, [Buying vs. Starting a Small Business](insert link to book on Amazon). He helps people decide if they should buy a business or start one. This is important for anyone who wants to own a business. It’s especially helpful for people who want to quit their job. David explains the good and bad things about both choices. He says both can be risky if you’re not careful.
Buying a Business – Good and Bad:
Many people want to buy a business. It already makes money. That seems safer than starting from nothing. But David says this can be a problem. He helps people with businesses at ALP Ltd. He says businesses are often too expensive. Just because the old owner did well, doesn’t mean you will. You have to be careful. Check things out first. Know how much the business is really worth. Know what “seller’s discretionary earnings” means. Don’t just look at how much money it makes! See his website, DavidCBarnett.com, for more help.
Starting a Business – It’s Hard Work:
Starting a business is hard. You have to do everything yourself. You have to make your product or service. You have to tell people about it. You have to figure out how the business will work. You have to get money. You need good workers. It’s a lot! Many new businesses fail. They don’t plan well. They don’t have enough money. Or they can’t do what they planned.
Franchises – A Good Choice?
We’ve talked about franchises before. Franchises can be a good choice. They give you a plan. They teach you how things work. They help you get customers. This can be easier than starting your own business. But you still have to be careful. Not all franchises are good. A bad franchise can be as bad as a bad business deal. David talked about bad franchises on the podcast before. Listen to it! [link to franchise warnings episode]. We also talked about how to leave your job and own a business [link to self-reflection episode]. We talked about selling your franchise, too [link to exit strategies episode].
David’s Advice:
- Be Smart: Test your business idea before you spend lots of money. Can you sell something that already exists? That’s a good way to see if people will buy what you want to sell.
- Get Different Opinions: Don’t just ask friends. They’ll say nice things. Ask other people, too. Look at data. RMA data shows you how businesses are doing.
- Be Real: Lots of people on the internet look super successful. But owning a business is hard. It’s a lot of work. You might not make lots of money. Businesses fail sometimes.
- Plan Ahead: Even if you’re just starting, think about selling your business someday. This will help you make good choices.
Buy or Start? What’s Best for You?
The best choice depends on you. How much risk can you take? How much money do you have? What do you want for the future? Think about it carefully. Do your research. Ask for help. David’s book, [Buying vs. Starting a Small Business](insert link to book on Amazon), can help you. He also has a podcast, the Small Business and Deal Making Podcast. Find him online, too. He’s on Facebook, LinkedIn, and Twitter. Learn more about him at www.InterviewDCB.com.
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I hope this helps! Ask questions in the comments.
