5 Tips for Purchasing or Starting Your Own Business

In the decade between 2004 and 2014, I started three different businesses. Two of those businesses were eventually sold, the other I retain an interest in as a passive investor to this day. I was recently asked what I wish I would have known when starting my own businesses. As I look back on my journey, I can easily identify points along the way where these tips would have been helpful as I prepared to launch each of my new businesses - and these tips certainly apply to those looking to purchase a business as well.

1. Manage your expectations of the time and energy required to launch or purchase a new company. Operating your own business is like adding a child to the family that must be nurtured and taken care of all the time. Your commitment will be a determining factor in your success or failure.
2. Develop your staff. Managing and developing a quality staff takes more skill and planning than I was prepared for. Anticipate that you will need to identify and pursue leadership resources. Your technical skill in your industry – which is what I worried about the most when I was starting out – is the easy and fun part of running a business. The hard work comes in staff development – and realistically, this is probably an area where you will need guidance.
3. Seeking revenue is important – but your focus will likely be on managing cash flow. Make sure to create accurate projections of your company’s expenses and capital needs – before the payment for your product or service arrives. Understand your sales and payment cycle to ensure you do not come up short.
4.  Assemble your advisors. Have a team of professionals – CPA, attorney, banker – who have experience in small business. Ignorance is bliss, but once you realize what you do not know, it will be crucial to have a team of Advisors that you can lean on. Furthermore, landlords and developers can be partners, not enemies that siphon all your hard-earned dollars. Bring them into the conversation to make these relationships count if you want to grow your physical footprint.
5. Make annual, five-year and exit plans. While your plans can and will change as your business grows, creating goals and structure will anchor your strategy and operations. My annual plans typically focused on operational improvements, my five-year plan was focused on growth (employees and profit) and my exit plan was personal. It can be a life change or how you wish to best leave your company positioned for success with-out you. You do not want the exit plan to be made for you!

One of the benefits of experience is that I am able to share candid advice, learned through my own mistakes, with other entrepreneurs and business owners. You will probably discover, as I did, that running your business requires some very different skills than you expected. But if you follow these tips and assemble a great team around you, you are well-positioned to move forward and adapt to the inevitable changes in your market.

Want to learn more? I can be reached at [email protected] or via LinkedIn.