Hi, Matt Clarkson here, bestselling author and online marketing expert. In the video today, I just wanted to share with you the comparisons of buying a business as opposed to starting one of your own. There are so many questions there and so many variables that people have when it comes to deciding, should they do one or the other.
If you were looking at possibly buying a business, the reality is these days it’s hard to find the right business that’s going to give you the return that you’re looking for.
Sadly, people can get into business these days without any form of license, without any form of education. That’s actually a little bit sad, and almost criminal that the government will let people get started in business without any education whatsoever.
You can’t drive a car without a license. There are a lot of things you can’t do without a license, and yet you can go and start a business. You can buy a business and spend any amount of money, with no clue about how to run a business.
A lot of people then decide to turn to a franchise, to trust in a system that will help them to create a business for themselves. These days, that’s a tricky business.
There are a lot of opportunities out there. There are a lot of businesses for sale. But finding the right business is critical if you want to turn it into a successful situation for yourself ongoing.
Most people that we talk to, a lot of people that we help and work with, they’re making the transition from being an employee to trying to create an income for themselves. They’ll look at spending 3, 4, $500,000 on a name‑brand franchise that’ll allow them to walk into an operation, often food, might be a services‑type business and just a couple of weeks’ training.
The reality is if you’re talking about big money like that and if you’re talking about getting into a situation where you might have huge rents, lots of overheads, and you’re locked in ‑‑ often for five years on commercial leases that can require personal guarantee ‑‑ this is a very risky situation to be in.
A lot of people that we’ve seen that might have been made redundant from a job, if they’re maybe a mature‑age person (mature age could even mean anywhere over 45, 50 even). People are finding it harder to get back into the workforce. They’ll look at turning to buy a business.
That is such a very scary place to be. What we see is people will get themselves into something like this. They’ve got these huge commercial premises that they have to deal with the rents. Staff and overhead’s ongoing.
Yet if you haven’t had a lot of experience in business initially, this can be a very dangerous place to be in financially. A lot of people think that just by showing up, that buying into a name brand this is going to give them the credibility. People are just going to open the doors.
There have been even some banks in Australia that have also had a lot of troubles, because they franchised. They chose people that were in the banking arena to be franchisees.
What they would do is they would open up the doors. They had a brand‑new, shiny bank there. Because they were an employee beforehand, the people running this top operation had no clue about getting business into the door.
To me, business fundamentally is all about understanding marketing and sales. Somewhere, somehow, someone has to buy something to bring money in the door. You can’t just actually open the doors and hope people will show up.
You have to go out there, you have to work hard, and you have to find business. You need to become a master in marketing. That really is the fundamental difference between success and possible disaster and fouling up.
The other side of the question or the equation is should you start your own business? Well, a lot of the same principles that we just discussed still apply.
Do you have the experience in running a business? Have you been an employee for such a long period of time that you’re almost institutionalized, to the fact that every day you show up somewhere? You know that there’s a manager or someone in charge who is watching over you, maybe prodding you in the back to make sure you keep moving forward and are productive.
Can you make the transition to waking up each day, going out there, hitting the pavement, whatever it takes to make this business a reality for you? That’s something that you really need to think long and hard about.
If you are prepared to do it, then you need to go the extra mile. We often talk to people. We coach people, about being in business. We’ve essentially specialized in online business ‑‑ eBay, online retail. They’re the areas that we’ve really focused on.
We’ve been able to help people make that transition. Often, a lot of the lessons that we go through, it’s not about how do you sell something.
It’s about the fundamental mindset of success. What you need to do is show up every day to make something happen.
Before you go out and make the decision for either of these things, it’s important to assess yourself. What do you need? What skills have you got? How do you get those skills?
You can get those skills out there. There are so many good mentors if you’re prepared to invest in yourself.
For me, with the many years now of trying to figure out business and trying to become successful, we’ve literally spent well in excess of $350,000 ‑‑ that’s my wife Amanda and I ‑‑ we’ve spent that money in the last 10, 12 years, on mentors, education, learning, figuring it out.
What’s amazing about that is if we were comparing that to a franchise over that period of time, we might have outlaid the same amount of money, but we’ve got so much more experience. The vast experiences that we’ve been through, the challenges and mistakes we’ve made.
At the end of it, we’ve come out to be a lot more practical, a lot wiser in the process. We really know what it takes now to make a business successful. Also, what it takes to just show up, be positive, be motivated, and make a business happen.
When you’re starting to look at this journey because you’re here on a website like this, and you’re looking for something different ‑‑ a different way of creating income ‑‑ look at all the variables.
Don’t just think that by buying a business you’re buying a successful outcome and you’re buying an ongoing successful outcome as well ‑‑ because the world’s changing. The economy is changing.
The way people spend money is evolving and changing every single day in such a fast pace. You need to really be able to keep on top of it.
Think long and hard. Think what’s right for you. Talk to experts. Talk and find out what type of business you want to get into and what’s going to work for you based on your time, based on your budget, and based on your experience.
Be wary. Be aware. Talk to a lot of people to find the right opportunity for you, because there’s always something out there for someone.
You’re going to try a few different things. Some you’ll like some you won’t like. The experiences will add up. Just make sure you do it within your own risk tolerance and understand the time frames are different for everybody.
I hope this has been helpful. Talk again soon. Bye for now.