The Business Development Bank of Canada estimates that there were 1.22 million small and medium-sized enterprises in Canada as of December 2021. Small businesses constitute the chunk of all businesses in America because many people are willing to channel their entrepreneurial spirit to bring their unique business ideas to life. However, owning a business doesn’t necessarily begin with founding it in your garage with a group of friends. Below are three other ways through which you could become a business owner.
- Take over a family-owned business
It is estimated that less than a third of family-owned businesses survive the transition to the second generation, and 50% of the businesses that do fail to make it to the third generation. Although this statistic isn’t encouraging, your family will still count on you to steer the ship in the right direction if you assume ownership. It is relatively easy to assume ownership of a family-owned business, especially if you grew up learning about its operations, the industry, and its patrons.
You will know about the company inside-out, so it is less challenging to jump right in. Also, much of the hard work has already been done for you. Therefore, you must only focus on business growth and carrying on the tradition. Indeed, there is an established brand, a working business model, a defined customer base, and reliable income. You will also benefit from relationships with the community, banks, investors, and vendors.
However, your business readiness will be questionable if you have not undergone a thorough apprenticeship to prepare you for leadership. Also, you may face an identity crisis and career limitations and may spend the rest of your life navigating family tension.
- Buy an existing business
You can also purchase an existing business to become an entrepreneur instead of starting from scratch. For example, if you are a young dentist eager to get your career up and running, buying a dental practice might be better than building one. An existing business already has cash flow and goodwill from its marketplace presence. Also, purchasing an existing business saves you the trouble of looking for the right location and building a customer base.
Additionally, there are already functioning systems in place, so you simply have to step in and keep the company running efficiently. It is vital to note that buying an existing business does not always guarantee success. If the company’s goodwill is tied up with the previous owner and their relationships with consumers and vendors, it will likely leave with them. Also, the outgoing owner may not offer the training you need to take over, and it isn’t easy to know if there are hidden motives behind the sale.
- Become a franchisee
Investing in a franchise also offers a quick path to business ownership backed by a proven system. As a franchisee, you are leveraging an already successful company’s tried and tested model. Therefore, you don’t need to have an original idea or struggle to make your brand recognized. Your franchisor will typically also offer business assistance since the success of your branch is key to their overall brand. However, becoming a franchisee comes at the cost of paying royalties to your franchisor. Also, you are not completely in charge of your business and may open yourself to more legal disputes.