Let’s be frank, not one sets out to be made redundant. However the reality is that in today’s economic environment many will face the prospect of being made redundant at some stage in their working career. A redundancy package can be a windfall for some, but also brings with it some new challenges and questions. We hope the following advice will assist you in making an informed decision if you’re considering entering the world of business ownership.
Advice for those moving from employment into business ownership
Is a franchise for you?
Franchised businesses are often considered by those entering the business market for the first time in their career, because of the support and systems they provide. A franchise can be a great way to get into business for yourself but not by yourself. When assessing a franchise company talk to other franchisees already within the system to assess their experience and success.
2. Play to your Strengths
Try to stick to a business that plays to your strengths and is perhaps in an industry you know or understand. If you’re good at working with your hands, with food, with finances, or with people - find a business that will allow you to shine.
3. Find a business you can grow
When assessing business opportunities it is important that you don’t just buy yourself a job. Look at businesses that you feel are not managed optimally, or where you know the skills you bring to the table could bring the business to the next level. Look seriously at businesses you can reinvigorate, improve, grow and have a vision for.
4. Get sound advice
It is safe to say that as you consider buying a business, there will conflicting advice from those close to you, whether they be your spouse, neighbour, relative or even your accountant or lawyer. Surround yourself with advisors that you trust and systematically work through all opportunities that match your strengths and make logical sense for you.
5. Don’t overextend yourself
If you’re in the twilight of your working / business life it is important not to overextend yourself financially or physically. Try not to place yourself in a position that may make it difficult for you should the business not turn out to be as profitable as you had assumed or more difficult for you to run.
6. Only work with professional Business Brokers and reliable sellers
Ensure you work with a business broker based in your area that prepares a professional, accurate and comprehensive Business Sale Prospectus or Information Memorandum. Don’t accept hand written notes or a few vendor prepared profit and loss statements thrown across the table at you.
Ensure that all financial data has been derived from financial statements (no verbal discussions about how the owner has bought a fancy car through the cash profits). Ensure that everything is accurate, disclosed up front and in detail. If the owner or broker is not up front and honest – move on to the next business.
7. Conduct thorough Due Diligence
Make sure you get all information in writing including staffing information, lease details, business history, up to date financial data, customer information, assets lists, exclusions, contractual information and other relevant data.
Our advice is to be taken only as general in nature, and all buyers should make their own investigations into every business opportunity and seek the appropriate advice.