What’s in store for small business? A lot, according to market developments and current trends. More people are taking a hard look at small business because of corporate downsizing or fear of such. Gone are the one-career lives with company pension for retirement—in their stead are professionals with half a dozen careers under their belt, many of these people now questioning their own position in this nation of corporations. As the most narcissistic generation in history ages, more are choosing the fate of a path they control rather than leave their destiny in the hands of a superior.
Technology is a silent assistant for those looking to acquire businesses. Baby boomers are entering their retirement years and are ready to hand their business down to son or daughter. They’ve been able to send their children through college, but alas, these children don’t want to work 60 hour weeks in the same monotony of their growing-up years. With no family to take the business, retirees are happy to sell the business to someone who will keep it operating. Due to waning interest, competition, and sluggish adaption to marketing trends business revenue often flat-lines or falls toward the point of retirement. The owner may have anchored a full-page Yellow Pages ad for the past decade, but the café down the street brings in long lines of customers within hours of announcing a special on Twitter. Disinterested and tired owners fail to summon the enormous energy it takes to stay abreast of marketing trends.
As a future business owner the best thing to do is learn business law, accounting, and management strategies before the real thing happens. Taking over a decaying business is not for the faint or those with an emotional reaction to numbers and risk. Knowing when to do and when to outsource tasks is much easier with knowledge of accounting principles and best practices. Being able to speak the language of CPA’s, bankers, and brokers puts one at a big advantage in this game. Formal education aside, sometimes the most important skill in developing weak businesses is being able to stick with intuition on the details. Of course intuition works best with lots of experience.
Assessing risk appetite is necessary when deciding whether to leverage an apparent bargain using credit card debt or whether to wait until there’s some real capital to absorb unforeseen shortfalls. Small business lending is scarce when businesses are cheap; scarce also are startup companies and IPO’s. Venture capital is there for those who can summon proven experience to take on their desired venture and for those who can outline their plans and projections in financier language. Flexibility and a cross skills set are necessary to run and improve a small business, particularly during a receding economy. Creativity and critical thinking are necessary problem solvers for those considering the small business path.
Entry prices are a bargain now. Many are leaving their businesses to retire, flooding the market with established businesses. Competition is weakening and morale is low as a result of downsizing. Banks and small business associations are pushing harder lending requirements and fewer people are able to receive funding to buy that bargain-priced business. To get in now all that is needed is cash or a lot of experience—preferably both, a good broker, attorney, and accountant, and patience for the right deal. Oh, yeah, and lots of hard work when the right deal closes. With a little luck and business skill to increase revenue, the investment will be worth triple in a year or two…