Many people love the thought of being able to own a business. They are quick to reel off the benefits. From being your own boss and taking time off when you want it. More time with family and friends. Financial rewards and never having to answer to anyone except yourself. Sounds enticing doesn’t it?
But the truth is owning your own business is not a bed of roses. Sure, you’ll have some great times when you feel on top of the world. But being a business owner is hard work, often relentlessly so. It’s full of unforeseen pitfalls and sometimes stressful enough you’ll want to throw in the towel.
So you better be ready to take the bad with the good. You’ll need to be passionate about your business. And you’ll need to find answers long before you even know there’s a problem. Good advice will see you part of the way. Passion and perseverance will also be important.
John & Lisa’s demise
Not long ago John and Lisa came to us in trouble. They’d bought a business 3 years earlier which had been doing well at the time. But things weren’t looking so good any more. John’s wish to own a business was a lot greater than his ability to run it. He found out that being a good tradesman did not make him good at running a business. Added to this, John and Lisa had not done their due diligence. They’d paid more for the business than it was actually worth.
In dire straits, they went to their accountant. She tried to help out by organising an ever bigger loan from the bank. Unfortunately this only put them further in debt. It also meant it took them longer to realise they were going broke. To make matters worse, they’d used their family home as security over their loan. The anxiety and stress had become enormous. Their family was suffering and their marriage was in trouble.
By the time Full Focus got involved, it was too late.
John and Lisa spent a few months trying to turn things around. But eventually they had no choice but to sell their floundering business. They sold it back to the guy they brought it off 3 years before, for cents in the dollar.
Their family home (which Lisa brought into the marriage with her) went under the hammer as a mortgagee sale.
John and Lisa have now separated, their marriage on the rocks. Lisa is living in a small rented flat and can no longer afford a car. At 60 years of age she’s trying to find work and/or faces having to go on a WINZ benefit. John, whose dream it was to own a business, is facing bankruptcy.
When to ask for help
Whether you buy an existing business, start a new one, or buy a franchise – the role of being a business owner has the same issues. If you’re buying a business or a franchise … will you negotiate this shaky ground yourself? Will you know what bases you need to cover and what hazards to avoid?
Perhaps your business came about almost by default. In the beginning it was you, self-employed for the first time. Before long there were others working alongside you – employees, subcontractors etc. There are dangers here too. You may not have covered any of the groundwork needed to start a good business. It’s easy to overlook the important steps and miss basic business principles.
Asking for help is not always easy, especially if you’re a male. That’s when the odds get stacked even higher. Because men largely have an ego which is out of kilter with their abilities. Women are invariably more pragmatic about their skills. They are more willing to acknowledge they need help, and ask for it.
Maybe you think you can do it yourself. The cost of the business is enough without adding any extra professional fees on top. But how much are you willing to risk? After all, this may be one of the biggest, if not THE biggest purchase you ever make. It may cost more than your family home. And dependent on how you structure it, in the end it may even cost you your family home. And if you’re lucky, that might be all it costs.
Before you begin
Whether you buy a business, or it evolves over time, it’s crucial to get the right advice well before you begin. You’ll want a collaborative team of specialist advisors. Their commitment to the success of your business is essential. Perhaps more importantly, commitment to your success as the business owner. This is crucial if you want to start with the odds on your side.
Being a business owner is not for the fainthearted. But if you’re up for the challenge the rewards can be extraordinary and can far outweigh the bad times.
(We’ve changed names to protect client confidentiality).