Entrepreneurship can sometimes feel like a long journey into the wilderness. The roads are full of curves and you can expect to find the unexpected on your entrepreneurial journey. For entrepreneurs with great ideas and funding, the roads can feel less treacherous, but not everyone is that lucky.
The general statistics do not give any comfort to start-ups as the odds of failure are stacked against new ventures. More than 70% of them are unlikely to be trading profitably after 5 years. Then comes the question of whether it is better to buy an established business, especially one that has survived for more than 5 years. The common sense thing may be to at least consider the option, but can you afford to pay the premium or how do you come up with an acceptable sale price when even large companies get these figures wrong. The case of Hewlett Packard (HP) and Autonomy is an example in this regard.
There are numerous stumbling blocks, but if you buy the right company at the right price, the benefits can help you to survive the dreaded curse of people starting out from scratch. There are no easy ways, but you can get a business that is generating income and staff who already know what they are doing to allow the business to continue with very little disruption. In most cases though, unless you can get a ‘motivated’ or distressed seller, you may end up paying a premium.
Thanks to the slow down in economies across the world and the lack of finance being made available to businesses, we are seeing an unprecedented numbers of businesses in distress. This in itself may create opportunities or a huge stone around the neck of the new buyer. The retail sector in the UK is facing a lot of challenges from the likes of Amazon, but there will always be a threat due to changes in consumer preferences or technology. Who could have predicted Nokia will barely be making any phones 20 years ago? or the “Kodak moments” we all used to enjoy by printing our holiday pictures and torturing colleagues and family members with our holiday snaps, now we do this on social media.
Being an entrepreneur has many challenges but definitely worthwhile for the few who manage to break through.
Whether or not you start or buy your own business does not matter as long as you get to your final destination. Whilst buying a new business may be a great idea, consider whether you can make it work where the current owner has failed and why the company has failed.
Some owners face unprecedented new competition but unless they adapt, they may struggle to survive. Many high street shops in the UK are struggling due to competition from the internet and most are only just realising the importance of e-commerce. The right leader, strategy and attitude can turn things around. The right people can change the future of a company and the life of employee. Listen to the TED story of Hamdi Ulukaya and the Chobani Yogurt company. He bought a company that was closing down and turned it into one of the most innovative companies you have never heard of. With new attitudes dreams come true.
Companies like www.business-sale.com can provide the much needed information about companies that the owners want to sell, but also information about those in distress or liquidation, as you can guess, for a fee, of course. www.companyrescue.co.uk is a UK based company providing information about businesses in trouble. Another company that can offer various services and advice about the different routes to take rather than just closing down the business is https://www.aabrs.com/services/. AABRS offers a wide range of services, it is always better to tap into the knowledge of these companies and at least to consider the options and make informed decisions.
If you are taking any of these options, remember to seek advice from the experts before you proceed. An unhealthy business can affect your health in a bad way.
The very bests of luck in your ventures.