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Business is Not a Social Giveaway

Make a profit and leave social programs to the Government

Being in businesses serves one purpose and one purpose only, and that is to turn a profit for its owners or stake holders. People who begrudge businesses for making a profit don’t fully understand their purpose. In a capitalistic system such as that found in the United States, profit is the soul purpose of any business endeavor. Small businesses are no different, people who go into business for themselves, usually do so for the income. When all is said and done, income is after all, the root of the businesses importance.   

Social endeavors on the other hand are driven by the need to provide a service. Some social businesses are for profit and some are not. Many times the proprietors take a salary while the business itself is self sustaining but does not occur a profit. Even though an  enterprise may be a social directed business, it still operates under the same financial  pressures as a profit driven business. Its aim may be to provide a clear social benefit but it must adhere to more strict rules and regulations than other businesses. The internal structuring may include volunteers and solicited donations. Accounting is strict and reporting to government agencies may be more scrutinized. Any profits occurred are mostly reinvested, or used to support its societal direction, rather than being paid to the owners of the business.

If you are community minded, you may want to start a business that isn’t just for profit but also has a social function. For example, you might want to provide a service for injured war veterans , or help improve conditions for disadvantaged children.

Here are some Advantages of starting a social directed business

  • You get a feeling of self-worth while earning a living.
  • The community and your beneficiaries benefit as your business grows and matures.
  • Customers may be willing to become involved in the business because it supports a good cause.
  • It could be easier to attract and motivate employees and volunteers to share in your social aims.
  • You could possibly qualify for a government or church based grant and raise funds from people or organizations who share your social aspirations.

Here are some Disadvantages of starting a social directed business.

  • Sometimes your social aims may get in the way of making progressive decisions.
  • You may have to make difficult choices as to how much income to make.
  • If there is any surplus,  profits it is expected to be put back into the business or go toward supporting the cause.

Why people change careers or start their own business

  • A change in conditions like loss of job or sudden need for more money.
  • A major life event can prompt or even enable you  to start your business.
  • An inheritance or other dramatic personal event may provide the funding to kick-start you into action.  
  • Loss of job or job stagnation could mean that now it is time to take the big step.

What are the Advantages of going into business?

  • It just might be an opportunity to start over or do something you’ve always wanted to do.
  • You have a chance to prove yourself.
  • You get to choose your future
  • You can make as much as you are determined to make. .
  • Even though you’re never your own boss you can have the flexibility of working around family commitments.

What are the Disadvantages of going into business?

  • You will have to ware many hats, meaning its up to you to take care of all business matters.
  • Going into business is a life-changing event and it can be very stressful.
  • Don’t make decisions that would effect others when you are personally disturbed.
  • It usually takes about three years to start showing a profit from a new business.
  • It is most unlikely that you will see any speedy returns on your investment and you must prepare for a long, and sometimes difficult challenge.
  • In the beginning stages especially, it could mean working long hours for little pay and making sacrifices in your personal life. Make sure those around you are prepared for the challenges ahead.

Should you start a business when you’re unemployed?

If you’re drawing unemployment your composition wages might not be enough to carry you through while starting a business. It may be better to find a job and slowly work into a business on the side. If you already have the tools, like a lawn mower (lawn service), a buffer and vacuum (carpet cleaning) or car (delivery service) then you might solicit people you know for business or references.

Starting your own business is not easy. It takes unusual fortitude to make the transition from wage earner to self reliance. Don’t attempt it unless you have the confidence and determination to succeed.

Happy Trails

The Best Business Education You Can Get – And It’s Free

I’m not talking about SCORE (Service Corps of Retired Executives). While you can get good business information from these retired executives there is a much better way. This article will teach you how to get current business owners to spill their guts to you about the most intimate secrets of their business.

Normally small business owners are pretty closed mouthed about their business and won’t make the time to talk about their business to a stranger but there is one time when the exact opposite is true.

That time is when the owner is selling his or her business.

And that is a great way to learn about various businesses and explore what you might like in the way of a business for yourself.

But is does take practice and time to sift the truth out of the sales pitch the owner is making. Here is a plan you can follow to accomplish this educational goal without getting sidetracked by bad information. Expect to invest a few weeks at this process before you get good enough at it to really get an accurate picture of the businesses you are “interviewing.”

Step 1: Get the classified section of you Sunday newspaper. The section you are interesed in is “Business Opportunities” or “Businesses for Sale.”

Step 2: Read all the ads and circle the ones that do not look they were put in by a broker. At this point, it is much better to talk with the owners directly rather than have the complexity of a business broker in the middle of it. (Once you get educated, you can use a business broker if you are truly shopping for a specific type of business to buy.)

Step 3: Call every business owner and express interest in learning more about the business for potential puchase. Take notes as to what the person says and when the initial pitch is done, set up an appointment to talk more and to look over the business.

Step 4: Go to your appointments, examine the business, look at the books, ask to see the tax records, see what kind of terms the business owner is willing to offer, ask about day to day operations, employees, etc. In other words ask the owner every question you can think of to both prove the earning claims and to give you a good feel for how the business actually works. (And if you really are interested in a particular business, ask if you can work in the store for a day or two to get a good feel for things before making a purchase decision.) Build a checklist of questions you want to ask and bring it with you so you don’t forget to ask anything. And revise the checklist as many times as necessary to add/modify questions. You will eventually end up with your very own business evaluation worksheet.

Step 5: Repeat every week until you develop a sense for what the sellers are saying and not saying about their businesses.

After talking with a few business owners, you will find that most of what they tell you is a stretch of the truth or it is pretty accurate but the numbers just do not make sense for the person purchasing a business. You will also learn a lot about how real people run real businesses. But most of all, you will get an amazing education you just can’t get in any other way and after this exercise, you should be able to size up any business and its true value in minutes.

Oh… a friendly advisory. Leave your checkbook at home while doing this exercise!

How to Learn About Any Business and Find Out Which One Suits You Best

One of the biggest mistakes the no-cash buyer can make is to be caught up in the excitement of having found what looks like the ideal business. This can result in taking short cuts in evaluating the business’ worth in order to get the deal sealed-unless the seller gets impatient and sells it to someone else. Make sure to evaluate and thoroughly research the reasons why the business is being sold. You are probably doing the seller a favor by taking the business out of his hands; he’ll accept any strategic maneuvers you offer him.

You might think at that point that all your business deals will be successful. Well, an easy purchase can bring suspicion; be discreet while conducting your research. Don’t make it too obvious. Remember that you will not offend a serious seller if you exhibit the professionalism of a serious buyer. So do not compromise any essential acquisition standards. Once you do the deal, that “baby” is yours…and you want to make sure it’s a healthy one before you sign any ownership papers.

Question: Is there any checklist I should follow while evaluating the business I am interested in?

Answer: Developing an acquisition strategy is a business planning exercise that defines the specific criteria to be applied in searching for and screening acquisition candidates (these candidates are businesses, not individuals). There are many reasons for this planning exercise: it gives you a frame of reference to evaluate acquisition candidates, it keeps you from wasting time on acquisitions that cannot be completed, and it helps you avoid acquisitions you will later regret. A defined acquisition strategy demonstrates that you know what you want to do, making it easier to retain qualified outside advisors as part of your acquisition team. These advisors don’t like wasting time on unsuccessful transactions, and you don’t want to waste advisory fees on poorly thought-out transactions. There are important issues to tackle and information to seek. A firm looking to acquire another company needs to focus on its current operations and identify current strengths and weaknesses. There should an analysis of future industry growth potential and trends within the existing business sectors, and an analysis of the competition.

Next, review past acquisitions and internal growth of the company, noting success and failures, and identify the reasons for those successes and failures. Based on the analysis, you should now outline your reasons for embarking on an acquisition program, determine financial resources available and define the characteristic of the desired acquisition, and finally define your company’s policy regarding financial intermediaries.

Question: How can I locate the right business?

Answer: There is a few ways to locate the business that you are interested in.
Print Advertising:

o Business opportunity classified ads are a viable way to advertise a business for sale. Many ads are placed by intermediaries (business brokers or merger and acquisition specialists), but some are placed directly by business owners. The larger local newspapers are the best source of such ads for smaller, privately-held businesses. Sundays are generally the most popular days for these ads. Business opportunity ads, whether for small or large businesses, usually describe the business in several short phrases, keeping its identity anonymous, and list a phone number to call or post office box for reply. The ad should be worded to demonstrate the business’s best qualities, (both financial and non-financial) and many include a qualifying statement describing the kind of cash investment or experience required. A telephone number in the ad will draw more responses than a post office box number, but may not permit the anonymity of a post office box.
Trade Sources:

o Trade sources can be a viable source of information on businesses for sale. Key people within an industry or in companies on the periphery of the industry, such as suppliers, often know when businesses come up for sale and may be aware of potential buyers. Every industry has a trade association and trade association publications can do a good job of communicating the sale of a business in their industry.

o Business opportunity intermediaries generally can be divided into two groups:

1) business brokers

2) merger and acquisition specialists

The differences between these two groups are subtle, but in general, business brokers primarily handle the smaller businesses, and merger and acquisition specialists handle the larger middle-market companies. Both groups usually ask for a contract with a 180 day period or a more exclusive right to sell the business.

Question: Are there other ways to find the right business?

Answer: Definitely. Another good way to increase your chances in locating the right business for you is to advertise your interest in buying. You’ll often read or notice that most advertising is undertaken by sellers, so it can be even more effective for you to advertise your desire to buy a business. Advertising will allow you to reach many prospects that other avenues cannot present.