There is no doubt about it, it can be exciting to buy a new business. However, in the process, it is very important that you don’t become unrealistic about future growth. Keep in mind that in the vast majority of cases, if a business is poised to quickly grow substantially, the seller would be far less interested in selling.
Richard Parker’s recent article for Forbes entitled “Don’t Be Delusional About Growth When Buying a Business” seeks to instill a smart degree of caution into prospective buyers. Parker notes that when evaluating a business and talking to the owner, many buyers come away with a sense that enormous growth is just “sitting there” waiting to be seized. In particular, Parker cautions those buyers who are buying into an industry that they know nothing about; those individuals should be very careful.
When buying into an industry where one has no familiarity, there can be a range of problems. The opportunities that you see may not have been tapped into by the existing owner for a range of reasons. You couldn’t possibly guess what these reasons might be without more of a knowledge base. Since you are an outsider, you likely lack the proper perspective and understanding. In turn, this means you may see growth opportunities that may not exist, as the seller may have already tried and failed. Summed up another way, until you actually own the business and are running it on a day to day basis, you simply can’t make a proper assessment of how best to grow that business.
The seductive lure of growth shouldn’t be the determining factor when you are looking for a business. A far more important and ultimately reliable factor is stability. The real question, the foundation of whether or not a business is a good purchase option, is whether or not the business will maintain its revenue and profit levels once you’ve signed on the dotted line and taken over. You want to be sure that the business doesn’t have to grow to remain viable.
As Parker points out, the majority of small business buyers will buy in a sector where they don’t have much experience, and that is fine. What is not fine is assuming that you can greatly grow the business. Of course, if new buyers can achieve that goal, that is great and certainly icing on the cake. But don’t depend on that growth.
In the end, everyone has some ideas that work and some that don’t. You may take over a business and, thanks to having a different perspective than the previous owner, are able to find ways to make that business grow. But realize that many of your ideas for growing the business may fail completely.
A professional business broker will be able to help you determine what business is best for you. A business broker will help keep you focused on what matters most and steer you clear of the mistakes that buyers frequently make when buying a business.
Chattanooga, TN is one of the most desired places in the country to live, work, and play.
Because Chattanooga, TN is breathtakingly beautiful with endless outdoor activities to choose from. And, it has a robust arts district, as well as an ever-growing number of technology companies and start-ups moving to this area.
Let’s take a look at what makes Chattanooga, TN a great place to live, start a business, work, play, and call home.
1. Great Business Climate
One of the reasons Chattanooga, TN makes a great all-around place to live is because it’s located just minutes from downtown. In addition, because Chattanooga has the whole package of nature, outdoor life, arts, and thriving businesses, it is easier to recruit and keep top talent.
2. Outdoor-Friendly Activities
Chattanooga, TN has an almost unlimited number of outdoor activities such as rock climbing, spelunking, hiking, boating, white water rafting, and more. There is something for just about everyone.
Here are a few of Chattanooga’s main outdoor attractions. Why not take a few minutes to review these destinations then plan your next vacation or staycation?
- Tennessee River Park
- Lookout Mountain
- Ruby Falls
- Coolidge Park and Carousel
- Tennessee Aquarium
- Ross’s Landing
And this is just the tip of the iceberg when it comes to the many outdoor activities there are in Chattanooga, TN.
Go ahead, try them all and you might just find you never want to leave!
3. Exceptional Attractions
Aside from all the outdoor activities this area has to offer, there are also a wide variety of other exceptional attractions you can add to your list of fun things to do in Chattanooga, TN.
Here are some must-see locations.
- Hunter Museum of American Art
- River Gallery Sculpture Garden
- Walnut Street Pedestrian Bridge
- Bluff View Art District
If you are looking for a place that offers the perfect work-life balance, then you might have just found what you’ve been looking for.
Come and see for yourself why Chattanooga, TN is one of the most desirable places to live, work, and play. You will love experiencing everything this area has to offer.
Look no further—you finally have the perfect place to call home!Read More
Finding the right Tennessee commercial real estate space for your needs can be a daunting task, if you don’t know where to begin. The best way to begin is to ask yourself a series of questions that will lead you to an educated decision based on facts rather than emotion.
Here are six questions you should ask yourself to help narrow down the best possible Tennessee commercial real estate space for your particular situation.
1. How is the space currently being used?
Learning how the space you are considering is currently being used could help determine whether your type of business might have the same success, or not. If you have a thrift store and that space is currently being used by an upscale boutique in a high-end part of town, your store might not fare as well. Whereas, if you have a restaurant and the surrounding stores are non-competing restaurants, your store could expect to do extremely well in this type of scenario.
2. How can and can’t the space be used?
Knowing exactly how the space can and can’t be used is extremely important, which means you should thoroughly read ALL the fine print, as well as any policies and regulations that are in place locally. The last thing you want is to sign a long-term lease for your fab new restaurant only to learn later there are regulations in place that would prevent you from serving specialty alcoholic drinks. Especially if those drinks would have been your restaurants biggest source of income.
3. Why is the current owner selling the space?
Learning why the current owner is selling the space could potentially help you dodge a bullet. If he/she is selling because of issues that are not readily visible, you need to know what those issues are so you can determine whether those same issues would affect your business as well. If they wouldn’t, you can proceed. However, if they would—move on to another space. It’s not worth taking a chance.
4. Are there any major changes coming to the area?
Always check with your real estate agent and the city planning board before signing a lease. The last thing you want is to sign a lease only to have a major road construction project begin a month later at the main entrance of your business. Especially if that project is going to last for years while redirecting traffic and deterring people from coming to the area.
5. How much income does the current owner generate for that space?
Learning the answer to this question will give you an idea of whether your business could do the same. If the current owner isn’t making much money, or their income is declining, and there isn’t any visible reason for it—there might be a location or demographic problem. Your Tennessee real estate agent will be able to help you research the specifics you need to make a decision based on the current owner’s unique situation as it relates to yours…or not.
6. How much drive-by traffic does the space receive?
How much drive-by/foot traffic the space receives is particularly important. This type of traffic is like free advertising; therefore, the more drive-by/foot traffic a space receives, the more visibility your business will have. And the more visibility your business has, the better the chances are you will succeed if all other facets of your business are properly aligned. Additionally, drive-by traffic also helps with brand recognition, because the more people repeatedly see your brand, the more readily they will be able to recognize and recall your brand when needed.Read More
Car washes are a competitive business. So if you are thinking about buying a car wash, you need to find ways to make your car wash stand out.
So…how exactly can I make my car wash stand out above the competition?
5 Ways to Make Your Car Wash Exceedingly Profitable
Here are five techniques you can use to make your car wash exceedingly profitable and stand out above the competition.
1. Give Them a Reason to Return
Never let your customers leave the premises without giving them a reason to return. People are creatures of habit. So if you can get them into the habit of coming to your car wash, you’ve won half the battle. Consider starting an awards program giving your customers points that will lead up to a free car wash for every service they have done. Or, perhaps you could offer coupons for a discount on their next visit, etc.
2. Preventive Maintenance and Productivity
Keeping your car wash fully stocked with supplies, accessories, and other necessities is vital to your success. It’s also important that your facility is always pristine, clean, and odor-free. That means everything from the signs, windows, restrooms, etc.
Additionally, your equipment should be working at peak performance at all times. This means having preventive maintenance tasks and a preventive maintenance schedule in place that details and schedules every task. Each employee should have a set preventive maintenance task(s) they are accountable for as long as they are employed.
3. Teach Employees How to Deliver Exceptional Customer Service
There aren’t too many automotive businesses that teach their employees how to deliver exceptional customer service. Don’t expect your employees to know how you want them to handle people and miscellaneous customer service issues unless you tell them. You should also consider cross-training all your employees to make your business more efficient and never left without someone who can handle any issue that comes along.
4. Prepare Ahead for the Slow Times
Train your employees that even in the down times, there is always something they can be doing. No one should ever stand around not doing anything. Do the parking lot stripes and/or benches need repainting? Do the fans, snack area, or the restrooms need cleaning? Does the building need powerwashed? Make a list of to-dos for each employee, especially in the seasonally slow times or when it rains.
5. Find a Way to Stand Out Above the Competition
If you want to stand out above the competition, you will have to find unique ways to do so. Take a look at your competition. What do they do? Is there anything you do better you could brag and build on? How do they market to their customers?
Consider donating some of your proceeds to a local charity. Or perhaps you could have set promotions such as a firefighters day, teachers day, or military personnel day. You could have a contest or give awards for your most valuable customers based on how many times they have visited your facility. You could also have a carnival or some other type of event at your facility and have it catered while offering half-priced car washes for those who attend. Then you could hand out BOGO coupons or something similar to entice those same customers to come back at a later date. This is great for name recognition and building your brand.Read More
If you don’t exactly understand what corporate social responsibility (CSR) means, don’t worry. We’ll cover the main points you need to know. CSR is increasingly seen as something that companies of all sizes need to be aware of, so let’s take a closer look at a few of the finer points.
There are 4 basic pillars in CSR: the community, the environment, the marketplace and the workplace. The community pillar of CSR refers to your company’s contribution to the local community; this contribution can take a variety of forms ranging from financial support to personal involvement.
The second pillar of CSR is the environment. The simple fact is that people around the world are becoming much more environmentally aware. You can be quite certain that a percentage of your customers and/or clients have environmental concerns.
Increasingly, consumers want to know that the companies that they are purchasing from have good environmental practices. There are many ways that businesses can show that they are environmentally aware. They range from recycling and using low-emission and high-mileage vehicles whenever possible to adopting packaging and containers that are environmentally friendly.
The third pillar of CSR is the marketplace. Proper corporate social responsibility includes the responsible utilization of advertising, public relations, and ethical business conduct. Another key element in the marketplace pillar is adopting fair treatment policies towards suppliers and vendors, contractors and shareholders. In other words, the marketplace aspect of CSR means rejecting exploitative business practices in favor of fairer and more equitable business practices.
The final pillar of CSR concerns the workplace. In the workplace pillar, CSR encourages the implementation of fair and equitable treatment of employees, as well as observing workplace safety protocols and embracing equal opportunity employment and labor standards.
Adopting CSR practices in today’s business climate is a prudent decision, as it serves to increase both shareholder and investor interest, while simultaneously encouraging a company’s value. Likewise, embracing CSR practices can make it easier to attract a buyer and that party may be willing to pay a higher selling price.
Typically, buyers want a business that has many of the attributes supported by the four pillars of CSR. Buyers want businesses that enjoy a high level of customer loyalty and have good overall relations with the local community. Additionally, buyers want businesses that have quality relationships with their suppliers and vendors as well as loyal and dependable employees.
Sellers must realize that buyers want products, goods and services that are in line with the current trends of the marketplace and have an eye towards future trends. Finally, buyers want as little “baggage” as possible. You can be certain that buyers don’t want to find any skeletons lurking about in the company closet. The proper utilization of CSR can address all of these concerns and, in the process, make your business more attractive to a potential buyer.