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Your Guide To Buying A Profitable Business & Retiring Early In 2018

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Buying A Profitable Business

Looking for ways to make an easy early retirement? Perhaps buying up a business is a more feasible way to make your dreams come true? After all, starting from the very beginning and becoming an entrepreneur now may not fit in with your life plans.

With the help of the internet and online tools, business ownership is not as complicated as it once was.  You can quite easily get your hands on a good business that’s already turning a tidy profit, and tune it up to make even more.

Investing in ready business equity means cutting out the expensive build phase entirely, but you will need some capital in order to get started.  Doing it the smart way means spending a little now, in order to make a lot more in the future.

To ensure you’re stepping into something profitable, there will be plenty of balances and checks you’ll need to complete before running to the bank. Here are some essential considerations for anyone looking to buy a business in 2018.

Spotting a profitable business

What does a profitable business look like? Funnily enough, it might not be one that looks like it’s raking in the cash. Don’t be fooled by a busy shop-floor or a popular Facebook Page — profitability is all about number crunching.

Things like distribution networks, equity, and market demand will dictate how much money you can expect to actually take home. Depending on your investment and retirement plans, you may need to shift focus based on how much ready equity and cash there is in the business right now .Profitability is all about managing business outgoings and cash flow, and ensuring that at its heart the business is balanced.

Speaking to the business seller and their financial team should give you a good idea of how things are currently doing. Look out for any potential warning flags like employees on little or no salaries, a high commission structure, low profits, or a dwindling business on a steady decline. (If you believe in the product or service and have the right skills, you could turn an ailing business around. But don’t count on it).

Note: A lot of high turnover businesses aren’t that profitable, and you need profits in order to take assets and cash out of the business. Make sure you understand the business balance sheet well enough to be able to make a sound judgement call.

Your Guide To Buying A Profitable Business & Retiring Early In 2018Check in with market demand

Market projections can be deeply flawed once taken out of the ‘lab’, but that doesn’t mean

that you shouldn’t at least try to gauge what’s happening out there right now. From industry reports to keyword research, even a cursory glance can help fill in some data blanks.

Google Trends offers some useful, if basic, data. Social media is a good place to find potential customer communities and influencers who will be able to tell you more about the scene on the ground. Even an internet business will benefit from having a clear understanding of the local landscape, so don’t dismiss local knowledge and developments. It all helps paint a more accurate picture of the current marketplace and landscape.

At the same time, demand can ebb and flow, and many ‘dead’ niches are still generating people a ton of profit. You will often hear people advising you to invest in evergreen, rather than seasonal businesses; but there is something to be said for jumping on a current bandwagon and riding it for all its worth. Products or services that are hitting the headlines right now can help give your business a much-needed boost.

The strongest position to be in is one where you have exclusive rights to a market, or you have a unique product or service. But that’s also a potentially vulnerable position, as others will be eyeing you up and attempting to copy what you’re doing….

Buy into a passion, or make it yours

Passion businesses can be risky, but a passionate group of customers is a surefire way to make a lot of money fast and make a profitable exit from your business.

Buying into a business that’s a passion for a large group of people is a fruitful endeavor, but with passion also comes challenges. Customers will be picky and you may have to invest time and money into community management in order to balance sales with customer experience.

From a business owner perspective, the more you like and care about what you do and what you’re selling, the better. It will keep you engaged with the business, and will ensure that you keep coming up with ideas to drive the business forwards.

Mark Cuban has gone on the record to say that following your passion into business is not a good idea, and that you should follow your effort instead. There is definitely something to be said for that attitude. A pet project won’t always easily turn into a profitable business.

Where to find businesses to buy

There are plenty of different ways to find businesses for sale — both online and offline.

Other people who are retiring are actually a good demographic to buy from. It often means the business is doing well, and they just need a new challenge or want to slow down their pace of life.

  • There are sites for sale on Ebay, as well as specialist website marketplaces
  • Social media groups and reddit threads are good places to go as sellers often advertise on there
  • Traditional business brokers who buy and sell businesses will work on commission, but they can help you save time
  • There are many offline places in the community like groups and noticeboards where people advertise businesses for sale
  • Reach out and put some feelers out there — if you let people know that you are looking, you will attract sellers.

Developing a business further

If you buy a business, you should definitely be thinking of ways that you can increase and improve scope.

Whether you widen the product lines, bring down overheads, improve margins, or re-launch the brand — it’s a good idea to have a few different developmental ideas up your sleeve. After all, there is always room for improvement!

Buying an ecommerce business is probably one of the easiest ways to buy a business and make it more profitable within the space of about 3-6 months. Often all that is needed is some better marketing and targeting in order to increase sales figures. If the ecommerce business is already making sales, you know you’ve got a product that works.

It’s advisable to stay away from a business that doesn’t really have a strong product offering at its core. Otherwise, you will just be buying a domain name and a logo, and an ecommerce business should be more than that.

Bootstrap or die

The best way to grow a business is to adopt the bootstrap mentality. Don’t go and needlessly invest in all the latest tools and tech, advertising, expensive consultants etc.

Even if you are in a hurry to turn the business around, you need to make sure that the business builds up its own cash so that you aren’t having to reach into your own pockets for everything.

Here are some ways to ensure profitability:
  • Hire slow, fire fast. Look at remote working and freelancers before bringing experts in-house
  • Know your business figures and get financial help if you aren’t good with numbers
  • Sort out your sales pipeline or customer journey — all businesses need a steady stream of prospects, and many make the mistake of trying to implement changes when it’s already too late
  • Be on the constant lookout for ways to drive down business overheads.

Reinvest for growth

Whether you are looking to sell the business on, or you want to keep drawing a healthy income for the foreseeable future, make sure that company profits are reinvested in the right things. Equity, assets, product development, marketing — invest in the things that will contribute to growth.

Multiple businesses, franchising, or a multichannel sales approach may work best for you. Don’t dilute your efforts too much, but having multiple profitable projects or businesses on the go is obviously a good thing! Opening up the business to partnerships is also a great way to make the most of running the business in a short space of time.

Buy a business that you 100% believe in and that has good profit potential. As a first-time buyer, don’t pay over the odds. Starting with a more modest investment may be the way forward — it’s certainly safer from a financial perspective.

    

This is article was contributed to Leisure Freak by the very talented Victoria Greene.

Victoria Greene: Writer & Digital Marketing Specialist

Now that I’m freelance, I love spending my days writing, learning more about digital investments, and sharing my tips with fellow entrepreneurs. I live for digital and am always on the lookout for the next big thing.

Starting A Business The Frugal Way: 7 Savvy Tips You Need To Know

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Starting A Business The Frugal Way: 7 Savvy Tips You Need To Know

 

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Clever ways to keep costs down when starting up your own company.

So, you’re considering launching your own company? Having your own business venture will give you somewhere to focus your time and energy and the prospect of seeing a healthy return on your investment is rather exciting too. Shows like Dragon’s Den and The Apprentice may lead us to believe that a considerable sum of money is required for a successful startup, but that’s not necessarily true. Here are seven top tips for launching a business while on a budget.

1. Utilize your skills

This may seem like an obvious one, but starting a business in a sector where you have interest and expertise is always going to set you in good stead. Also, consider that your business could be service-based rather than product-based as this will keep your overhead costs to an absolute minimum. If you’re a dab hand in the garden, for example, why not offer your gardening and landscaping skills locally? Or perhaps your career was in finance, so you are able to pitch yourself as a bookkeeper.

2. Seek out investment

You can definitely start a company on your own with only a small amount of capital behind you, however if you have a more ambitious business plan or are very short on startup funds, there are many ways of gaining a little helping hand. Crowdfunding sites like Kickstarter and Crowdfunder are great tools – they are platforms for you to pitch your idea on in order to receive funding from friends, family and other unknown investors, which will eventually help you to launch your business. You could also look into the possibility of government schemes and local funding being able to assist you.

3. Make mutual business deals

A major way to save on costs is by organising trade-offs with other businesses – this move will require you to be quite pro-active and maybe even a little bit brazen, but it’s true when they say  ‘if you don’t ask, you don’t get’. Let’s imagine you’re setting up your own B&B and you contact the local paper to invite them to come and review your facilities. If they say yes, they will be getting a lovely complimentary stay and you will be getting some free advertising – win, win. Or perhaps if you know somebody who’s good at website design, you can get them to design your site for you in exchange for use of your services.

4. Advertise for free

As a startup, you might not have the funds for traditional forms of advertising, but that doesn’t mean that you can’t advertise. Exploit the powers of free promotion through social media. Social media users make up 37% of the entire world population and total 2.8 billion people worldwide, so that’s the place to get your brand noticed. Set up pages on any social media sites that are relevant to your target market and offer discounts and giveaways to gain new followers straight away. Also, it’s important not to forget the power of word of mouth – tell your friends and family about your new business venture and get them to spread to the word!

5. Acquire a sponsor

Start by making a list of brands that you affiliate with and think up ways that you could promote their brand. This could be in the form of banners on your website or marketing signs at events. You can even suggest promoting their products – for example, if you own a tutoring service, you could team up with a local bookstore. If you send your students there for books, they may be able to offer initial sponsorship to help your business get off the ground.

6. Minimize waste

From packaging to printing, you need to be savvy with your resources because the small things can quickly add up. A good way to save money (and help the environment) is by going paperless. Many companies and consumers are used to e-correspondence now, so why not eliminate as much printed material as you can? Also, it’s worth considering dropshipping ­– this is where a retailer doesn’t have a shop or warehouse and the products go directly from the supplier to the buyer. By using this method of shipping, you won’t have to rent out a warehouse or pay for packaging, meaning you will save a substantial amount.

7. Budget branding

The great news is, creating coherent business branding can be done with minimal cost. There are so many websites out there for reasonably priced business cards – you’ll be sure to find great deals on Vistaprint, and the same goes for logos on Logo Shuffle and Logo Shines. Remember to create a consistent brand image, which means using the same logos and brand colours across all of your commercial channels and social networks. The next step is getting it out there into the world for potential consumers to see – this can mean placing it on your work clothing and even your vehicles so that your logo becomes locally recognised.

Now you’re all set with the advice you need to start a business the frugal way, it’s time to take the plunge and become the entrepreneur you’ve always dreamt of being. Who knows, you may just be able to fund an early retirement.

This is a contributed post to Leisure Freak by the awesome author Kayleigh Alexandra.

Kayleigh Alexandra: Content Marketer & Ecommerce EntrepreneurKayleigh Alexandra: Content Marketer & Ecommerce Entrepreneur

Passionate about writing for the startup and entrepreneurial audience, I love to share my insight into the world of ecommerce and digital marketing. I hope to inspire others to start their own journeys and share their stories. Find me at MicroStartups.

How to Start an Online Microbusiness on a Shoestring Budget

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How to Start an Online Microbusiness on a Budget- start a microbusiness onlineImage Credit: Pixabay

Dreaming of being an online entrepreneur? Struggling to make ends meet? Here is how to start a microbusiness online, budget-style.  (If you want to learn more about setting up your first website, read this Leisurefreak guide).

Plan it all out & budget sensibly

Online markets can be volatile, and there are sneaky hidden costs out there for the unsuspecting online entrepreneur. Mitigate any chances of overspending by planning everything out in minute detail before taking the plunge. Budgeting is your friend, especially when margins are tight.

 

  • Forecasting is really important – you can learn a lot from traditional forecasting models for startups, but remember to adjust this to the online model. You will be paying out for services, not traditional business overheads; and though there’s a lot of free stuff out there – you will be hit by mounting subscription fees if you want to grow fast.
  • Map out all the different channels you are going to spend money on like web development, design, SEO, images etc. Make sure that you include timings as well as costs, as waiting around for a developer to finish when you have SEOs on standby can be expensive (and stressful). Plan extra breathing space into a development budget to allow for testing and tweaks.
  • The SaaS model can quickly add up – evaluate whether you can make do with free trials, or whether you are going to eventually end up for going for pro packages.
  • Don’t forget to include maintenance costs like hosting and content management in your plans.
  • Read the small print of everything you’ve paid for – who actually owns the website? Where is your content hosted (their server, or yours)? What happens if you want to terminate a service? What image rights have you actually got? Paying less now may end up costing you WAY more in the future.
  • Don’t try to grow too soon. The beauty of online work is that you can stay quite small as you build up funds.

Learn things for yourself

Don’t outsource if you can learn how to do things yourself.

 

There are loads of free courses out there that can help you top up your digital skillset and get more clued up on things like SEO, web design and PPC.

 

  • The main things you will benefit from learning yourself are content management and social media management. Updating your website yourself is a great thing to do and means that you have 100% control over content. Most CMSs offer extensive training packages – use them wisely. Social media management is made way easier with social media tools like Hootsuite (who also offer a certification).
  • Start learning with free online courses and certifications like HubSpot’s Inbound Certification to help you navigate the world of web promotion. There are so many free resources out there – use them to help you grow.
  • Even if you don’t learn enough to implement all the tactics yourself, you will be better at vetting suppliers, spending less money and making better business decisions.
  • Eventually, you might even be able to monetize all this learning and offer out your web services to others.

Sell things online

A great way to make money online is to take a cut of the growing ecommerce industry.

 

You don’t need a warehouse to be an ecommerce merchant; in fact, you don’t need much at all to become an ecommerce merchant (except a lot of common sense and time).

 

  • Start small and sell products that will be easy and cheap to produce and ship. If you have a specific business idea you think will work (like upcycling vintage dressers), do your market research before investing in anything. Use search engine trends and searches to give you an idea of current competition.
  • Take advantage of free trials and the digital ‘try before you buy’ mentality when choosing an ecommerce platform (like this online store free trial). Use the professional themes you get with the platform, and customize with a logo and your own imagery.
  • You can dropship products if you don’t fancy getting involved in the logistics of shipping products yourself. This essentially means re-selling other retailers’ products on and can be very lucrative if you get into the right niche.
  • Sell digital products like ebooks, webinars and worksheets from your website to cut down on production costs.

Leverage advertising & affiliate income

Use the power of advertising and affiliate marketing to earn passive income online, reinvesting it back into your microbusiness.

 

  • The beauty of running an online business (or even just a website), is that you can monetize it with ads or affiliate links.
  • Though these methods are totally legitimate, it’s important you do them in a ‘non-spammy’ way and that you always disclose any affiliate links. Make sure you aren’t negatively impacting your website’s look and feel.
  • Running a product review series is a great way to get steady affiliate income. Just remember to optimize for keywords and promote your content through social media and search engines.

Local SEO

Not all SEO is fancy with bells and whistles on.

 

Whether your business is all online, or has an offline arm, use Google maps, local listings and reviews to appear higher in search results. (Moz has some great posts on local SEO and where it’s going right now).

 

  • As a small business, take advantage of free online promotional tools like Google MyBusiness. Takes minutes to set up and has instant results.
  • List yourself on free online directories – just make sure that you keep your business and contact details consistent.
  • Register for a business address and tell Google where you are – local searches with maps attract loads of clicks (especially on mobile).
  • Ask customers for reviews and encourage them to leave them with an email or a phone call – they are a brilliant form of free online marketing that people trust.

 

We hope you’ve got some good ideas on how to manage budgets smarter when starting your online business. What online business tips have you got to share? Let us know!

 

This is a guest post by Content Marketer & Startup Specialist Kayleigh Alexandra.

Passionate about writing for the startup and entrepreneurial audience, I have recently been part of setting up an exciting project at MicroStartups.org. We donate all our website profits to charities that help people reach their full potential. Find out more on Twitter.