What can be disheartening to a new buyer who thought he or she was going to build a little business empire is to realize they’ve put their life savings into some enterprise and they’re still stuck in a restaurant or a retail store--just like when they worked for someone else
Dublin, CA (Vocus) March 12, 2010
Noting that entrepreneurs can be confused about the difference between investing in a business opportunity and buying a job, a popular website has posted a blog to explain the issue. The article on BizBen.com--online marketplace for businesses offerings and resources, covers three important factors to consider for anyone interested or involved in buying or selling a small business.
“One of the most discouraging things a prospective business buyer hears is that he or she is just ‘buying a job,’” according to Peter Siegel, MBA, Founder and CEO of BizBen.com,
“And that might be true in a lot of cases. Or maybe it’s true now, but the buyer can turn the enterprise into what we consider a ‘business’ more than a ‘job.’”
Siegel said “in any event, it’s critical that buyers understand the realities of the marketplace for business opportunity offerings so they can focus the search.”
The blog points out that there may be little difference between an employee working hard at a job and an owner putting in the same amount of time and energy working in his or her business.
“What can be disheartening to a new buyer who thought he or she was going to build a little business empire is to realize they’ve put their life savings into some enterprise and they’re still stuck in a restaurant or a retail store--just like when they worked for someone else,” Siegel said.
One question posed in the article is whether an investor who is not involved day-to-day in the company, and realizes no income from it, has made an intelligent choice of a business opportunity.
“What can happen,” said Siegel, “is that the owner is unable to realize any return on the investment unless he or she replaces one or more employees.
“That looks a lot like buying a job.”
Siegel said the article discusses the possibility that a new business owner can expand the enterprise beyond what would be considered ‘buying a job’.
“If there is a way to build equity, the company can turn out to be a smart business investment, even if the buyer has to work in it all the time.”
The article also makes a distinction between the owner who works “in” the business--with all of the effort directed at addressing daily operating issues--and someone who works “on” the business.
“The owner working ‘on’ the business is taking the longer view and planning on adding to the value of the business opportunity by attracting more customers with a marketing effort or by expanding the menu of products or services.”
The BizBen.com executive also noted that some buyers of franchises or independent business opportunities have no expectations other than having some “pride of ownership.”
“We meet people who do understand that buying a business may not change their work life or improve their income. Besides, it requires that they assume some risk by putting in their money.
“For others, this is a big surprise.”
Siegel said the intent of the blog posting is to “prepare and educate anyone who’s planning to buy a business opportunity.
“They need to know there can be a difference between acquiring a business opportunity, and just replacing your work hours as an employee with the time spent as an owner.
“There are pluses and minuses on both sides. Our purpose is to make sure people are informed about what they‘re getting into.”
BizBen.com is one of the nation’s longest-running online clearinghouses for businesses for sale. It also provides valuable advice, ideas and information for buyers and sellers of business opportunities and the business brokers and other professionals serving this market.
For More Information:
Contact Peter Siegel