Another option is taking over an existing business. You should determine what kind of business you are looking for; establish your budget; outline your expectations in terms of revenue, growth potential, and stability; and then seek businesses that meet your needs. You can usually find purchasing opportunities through word of mouth, professional organizations, or real estate brokers.
Buying an existing business has advantages similar to franchising: you can take advantage of someone else’s hard work and experience to get your business off the ground quickly. However, by being the sole business owner, you have much more control over the product and processes. You also avoid royalty and franchise fees, which can be quite high.
Just as with franchising, however, there are some significant risks. The obvious question is: why is the business up for sale? Maybe old Joe Smith just wants to retire and see his diner go into good hands… or maybe he has credible information that a big discount restaurant is going into the vacant lot next door.
Take your time and have a good look at the business’ performance in the past, changes in the community, and its liabilities (such as insurance payments, lease agreements, and back taxes). Businesses typically take a while to sell, so don’t rush into the first opportunity you see. Having your wish list and budget clearly established can help you keep a cool head, too.
Always have a professional (such as an accountant, lawyer, or insurance underwriter) review documents as appropriate. Once you’ve signed on the dotted line, there’s no going back, so make sure you have a full understanding of what you’re getting yourself into.