Don’t Drop the Soap on a Startup
Does the sense of controlling your own destiny, steering your own path, and leaving a legacy sound exciting to you? Perhaps you’ve dreamed of launching your very own business. How incredibly rewarding it would be to be your own boss and make your own schedule? Building a successful business that you could pass on to the next generation can be an amazing feeling. That’s the entrepreneur dream, right?
According to the 2016 statistics published by the Small Business Administration (SBA), over 500,000 new businesses are started annually. About 39% of startups survive after the first year in business. A high percentage of small businesses fail while the overall survival rates are substantially low. Based on the analytics, 87 out of every 100 new businesses will not surpass being in operation 10 years or beyond. This is another reason why starting a business should be approached with high caution and all alternatives should be explored before building a business from scratch.
Investing in a startup requires hundreds, if not thousands of labor hours, funding, continuous years of investing time, all while trying to put all the pieces together to get the business up and running to turning a profit. There’s an unknown formula to building a successful business. No one business formula is the same. In order to build a successful business that can surpass the 10 year mark, the right mixture has to be incorporated. Timing, financing, customers, employees, skills, marketing, locations, product/services, vendors, demand, pricing, hard work, determination, commitment, perseverance, and sometimes luck are all part of that mix. If any of the ingredients required are a tad bit unbalanced, they can contribute to diminishing returns and ultimately, business failure.
Starting your own business can be intimidating and there’s no roadmap that guarantees that you’ll be successful. In practice, it’s pretty easy to get a business started and off the ground once all the pieces are put together. However, it can be quite challenging to keep it from sinking. Why drop the soap on a startup when you can buy a successful, established business?
Most people who start a business never consider purchasing an existing business or don’t believe they can afford to do so. Purchasing an existing business can be just as affordable as starting one from scratch. They tend to generate a better return on invest (ROI) plus there is less risk involved.
New business owners are inclined to be more focused on starting new ventures and reinventing the wheel while not considering that many similar businesses are up for sale. So, why drop the soap on a startup when you can buy a similar established and successful business (a business you would have been competing with), be trained by the founder, and add your own spin to improve the systems which are already in place. The great thing about buying an existing business is that you can still seize new opportunities, disrupt the marketplace, and achieve your dreams at the same time.
Eighty-seven out of one hundred startups drop the soap after risking their life savings, investors’ money, ruining their credit, and in the end, they are left feeling disappointed and drowning in tons of debt. Don’t drop the soap on a startup! Lower your risk by purchasing an established business or franchise with a proven track record and growth potential.
Sabrina Ward is an Accredited Business Intermediary with over 17 years of entrepreneur experience. Her practice includes assisting buyers and sellers of privately held businesses in the transfer of ownership and restructuring struggling businesses to maximize their supply chain value. She may be reached at (972) 755-9707 or by email at Sabrina@WardingtonIntl.com. Her business broker and consultant website may be viewed at www.WardingtonIntl.com.