If you have a dream of becoming an entrepreneur? Do you have a “big” idea that you would like to materialise? Or would you rather buy an existing business and then carry it forward?
If you are thinking of buying an existing business, as a woman entrepreneur, how would you go about it? There are some factors involved. Firstly, it involves finance – more costs will be involved upfront. But the relief is that it would be less risky, than it would be, if you were starting from scratch. Financially, you will be supported by a clear sales history, which will give you actual profit and loss records rather than rough estimates. With the acquisition, it is possible that you may also acquire valuable patents or copyrights of the company. Here one thing is clear – you will certainly have the opportunity to put your expertise to test, and perhaps, you will also find that driving a slow business in an exciting upward direction will prove to be adventurous, giving you high thrills!
According to experts, an increasingly popular career path today, specially as far as millennials go, is that of acquiring and running an existing business operation, or what can be called “acquisition entrepreneurship”. But, do check – is acquisition entrepreneurship right for you? It depends on your personal temperament and preferences. Of course, some people who have taken this track, have found it to be rewarding – financially, personally and professionally.
The most visible benefit is – instant impact. Instead of trying to navigate a corporate entity or pour over business plans (which may be the problems that a business owner faces), here you find yourself fully in charge. Not only will you be heading a full-fledged organization, but you will find yourself making decisions that produce results. The overall plus point is that you can enjoy your leadership status, as you steer the business to success!
Another plus is that this offers you a flexible lifestyle. If you are leading a fledgling start-up or a large firm, you will certainly be tied down. But, when you’re running a stable operation, you rarely need to keep day-night work schedules, including weekends (which might intrude into your personal life). Here, you are the boss, you set the rules!
But, the hard truth is – a small-business acquisition and is not without its challenges! So, you need to be sure it suits you, then start your search, and move in to negotiate deals, and then transit to the leadership mode – in a systematic way.
Firstly, to succeed at acquisition entrepreneurship, you need basic management skills like: an understanding of finance, people management skills and a sharp decision-making aptitude. But you need other attributes, too. Confidence and persuasive ability are key. The job as new boss, requires you to reach out and display a positive attitude to a team you don’t know, to employees and customers you inherit, and also to the business brokers, investors and sellers.
Top of the list is that you should be an enthusiastic learner. As you search, you will have to get familiar with industries, sectors, and companies that you may not have focused on. And, when you target on some business area, you will need to pick up knowledge about the business. As an owner and CEO, you will have to develop expertise across functional areas; plus, you will have to stay curious, and be sure that you can grow into the new job role.
What are the trade-offs that you will have to make as an entrepreneur? In choosing to go out on their own, entrepreneurs will have to reflect on: do you value what you will gain more than what you will lose? For example, you may be giving up the comfort of working in a larger, more structured organization where you have greater access to capital, be backed by a well-known brand, and the support of peers, bosses, and functional groups such as HR and R&D. Now, your pay will be directly linked to your performance. But there is a negative flip side: inevitable mistakes and slow down cycles will hit you harder.
But most importantly, top priority should be – cash flow. It has been observed that the most common problem for small firms under new owners is that of cash falling short. So, set up a process – to have total control over all cash flow; whereby you approve all payments before they go out, and review your balance sheet at regular intervals. Thus, you can have a grip over the situation.
It will be inevitable – to build relationships, along the way.
Now, step back and look carefully at what you have got into. After considering all angles, if you still feel that that you have the skills and the appetite to become a small-business owner, then go ahead!
There are growing pains, which are part of the journey, but if you have gone about the process properly – like going through the acquisition process with a lot of thought, things will soon settle down. Then, you will be able to focus on growing your small business into a successful medium-sized one, or if luck would have it, to a large enterprise!