Whether starting from scratch or buying an established business, how do you capitalise on business opportunities?
Opportunities for entrepreneurs
Starting a company from scratch isn't easy, and despite the influx of start-ups, around 50% of small businesses actually fail in the first year and a staggering 95% fail within the first five years. So why is it that so many individuals want to start their own company?
Setting up your own firm offers numerous advantages over working for someone else: the chance to work in an area that interests you, the opportunity to promote products and services that you believe in and about which you are passionate, flexible working hours, the chance to work from home and ultimately an element of control over how the business is run. However, what if you don't have a unique small business idea?
If you don't have a viable idea for a small business or you aren't in a position to set-up your own company from scratch then there are plenty of other business opportunities out there that share many similar benefits and advantages with that of starting your own company:
Buy a business
Buying a company that has already been established can be much simpler than setting one up from scratch and can make very good business sense.
Many entrepreneurs will have the know-how and experience needed to run their own company, but would prefer the security that comes with a company that already has a strong business concept and market presence.
A company that has already been up and running for some time will also have the benefit of an already established customer base, existing suppliers, equipment and trained staff.
For a full guide to purchasing an established business, please visit our buy a business fact-sheet.
Franchising is a business opportunity in which business owners release the rights to their business model and logo to a third party so that another business professional is able to trade under their brand name.
Franchising has become increasingly popular in recent years, possibly due to the fact that a far lower rate of failure comes with a franchise arrangement than with a start-up business. Large franchises may also have national marketing campaigns, a known trading name and a strong reputation within the field - all of which will increase your chances of success and profitability.
According to industry figures, 90% of franchise units (that is including new franchise businesses) claim to be profitable, which compared to the success rate of the average start-up business is an impressive figure.
Individuals considering seeking out franchising opportunities or who are simply looking for comprehensive information on the topic may find our full franchise guide to be of use.
Whilst it is true that buying a business or franchise means that the groundwork has already been completed, that does not mean to say there is no room left for creative license or improvements.
Taking on a business or buying a franchise will provide you with a platform to develop your own business ideas and will give you the opportunity to bring something new to the table.
Opportunities for business owners
Individuals who already own their own businesses and are looking to expand, diversify or seek out new opportunities also have plenty of options at their disposal, including the following:
Mergers and acquisitions
Mergers and acquisitions (M&A) is the buying, selling and dividing of companies to promote growth and expansion.
Both have become increasingly popular development methods for businesses in recent years as in many cases it is more beneficial to take on a company's existing processes, or to amalgamate with another firm than it is to expand and invest internally. Below is a brief description of how the two terms differ:
Merger - The amalgamation of two companies in which the owners of both hold equal control.
Acquisition - When one business buys (acquires) a second and generally smaller business, which may then be absorbed into the parent business or run as a subsidiary.
Similarly to buying a business or a franchise, there are numerous benefits to growing your business through one of the above methods - cost reduction, shareholder value, profit margins and competitive advantage to name a few.
Visit our guide to mergers and acquisitions guide to find out more about the key processes involved in M&As and how they could either help or hinder your business.
Selling a business
As much as starting, owning and growing your own business can bring with it a great sense of achievement and gratification, there may come a time when a business owner wishes to sell-up and seek out other opportunities.
Individuals wishing to have no further involvement can opt for a full sale; many however, will wish to remain involved in some way with the business that they worked so hard to build e.g.:
Partial sale - Owners wishing to maintain a small stake can sell off the majority and continue to remain involved on some level.
Asset sale - Instead of selling the business in its entirety there is also the option of selling some of the businesses assets in order to release capital.
For more information about the key stages and processes involved in selling a business, please visit our comprehensive business sale guide to find out more.
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