Choosing A Business

Each year I am amazed, but not at all surprised, how the entire category of entrepreneurship continues to grow. I was however stunned to learn that a number of business brokers reported a less than stellar year in 2006. In fact, most people I have spoken with in the business brokerage world have told me that sales were down or flat, and that deal size has been down. I think they’re missing the boat.

People are clearly going far beyond the world of business brokerage to launch their entrepreneurial career because industry wide, entrepreneurship is on a tear!

I know in my publishing business, things are booming. I still cannot believe how many “how to” guides we sell each month. We first launched our guides online in April 2001. We sold $419.00 the first month. Now we do more than that overnight while I’m sleeping. I see the traffic patterns each day/week/month and the year over year numbers are very encouraging for entrepreneurs.

More people are getting into their own businesses which mean more resources become available and each feeds the other.

This upsurge also holds true for business start-ups. According to a recent article by Phaedra Hise of Fortune Small Business, “We are in the midst of the largest entrepreneurial surge this country has ever seen. According to Small Business Administration projections, nearly 672,000 new companies with employees were created in 2005. That is the biggest business birthrate in U.S. history: 30,000 more startups than in 2004, and 12% more than at the height of dot-com hysteria in 1996.”

Read the full article at:

Anyone who thinks about going into their own business usually considers either a start-up, a franchise or buying an existing business.

I’ll cover why I prefer buying an ongoing business in other posts but the point I want to really make is that entrepreneurship is a phenomenally active space right now, and it is not going to stop.

The downside of course is that the market is constantly being flooded with new buyers. Unlike real property where this condition would push up valuations, overall business prices and multiples have remained very steady for many years. That’s the good news. The bad news is that a good business hits the market and can be under contract in days so your biggest challenge is the competition from other buyers. you need to act fact and pounce on an opportunity. I have learned two very important things about opportunity:

First, it arrives in a second and is gone in a flash. Second, opportunities are not missed, somebody exploits them. So if you let it pass you by, someone else will benefit.

With the new year upon us, if you want to get into business, then get aggressive.

The last thing you want is let the opportunities pass you by in 2007 and still be thinking about the same thing next year.

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