Are you considering starting a business or buying an existing business? As a small business accountant, whose livelihood depends on small business clients, my advice is DON’T.
There are different challenges to starting a business versus buying an existing one so I’ll focus on starting a business. You need to ask yourself and answer the following questions:
- Does the world really need another massage therapist, tattoo parlor, auto mechanic, whatever you want to be?
- What separates my business from all of the other businesses out there?
- Do I know what business I’m really in?
- Am I comfortable working twice as many hours for half the pay of the average tenured schoolteacher?
Here are my answers for you:
- NO! The world probably does not need another business like yours. Look around. How many existing businesses already offer your product or service? They already have all of the advantages especially the most important advantage of customers. This leads to Question 2.
- Unless you can come up with a differentiation, YOU WILL FAIL! Even with a new big idea – a true entrepreneur – you need something big that separates you from your competition. Not only do you need the differentiation, you need your customers to recognize and value it. That brings me to Question 3.
- You are in the marketing business. Regardless of what service or product you actually deliver, all businesses are in the marketing business. If you don’t know marketing or are afraid of marketing, YOU WILL FAIL! Marketing is acquiring customers and getting them to stay repeat customers. Read some Dan Kennedy BEFORE starting a business. No Customers = No Business.
- Facts matter. The average schoolteacher works far less and makes far more than the average business owner. There is no down time. No one gets summers off. You are responsible for paying all your bills and trying to have something left over for yourself, your retirement and your healthcare. If you want a safe, comfortable career, become a school teacher or other government employee.
If I sound bitter, you are delusional. This is the hard truth of business – most people fail. The lucky few get too much credit and publicity. If I haven’t talked you out of it, good luck.