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  • Why An Entrepreneur Should Purchase A New Franchise

    Feb 18, 2020

    Every week numerous individuals contact IBA, the oldest business brokerage firm in the Pacific Northwest, interested in buying a business with a desire to learn which companies we currently have exclusively listed for sale. The demographics of these individuals include corporate employees desiring to stop working for “the man” and take the helm of the ship as business owners; people who have previously been successful entrepreneurs who are looking for their next project; personnel transitioning out of the military into the private sector; and first generation immigrants to the United States who want to utilize their capital, knowledge, and experience to take advantage of the limitless ladder of economic opportunity that exists for everyone in America.

    All inquiries to IBA are provided with superior customer service and education on how to review information on the businesses currently available for purchase with the firm and new companies that enter the market that match their acquisition criteria in the future.  Unfortunately, being a business buyer can be frustrating. A buyer can be motivated and qualified to purchase a business and still not find an appropriate acquisition candidate for many months or even multiple years.  Why is this true?  It is the same reason it can be frustrating to be a business broker at IBA, a firm commonly recognized as the most selective “sell side” representation firm in the Pacific Northwest.  The businesses that we want to represent and buyers want to buy do not need to be sold.  Think about it from the business owner’s perspective, what is the urgency to sell a business that you enjoy owning and managing that is profitable and providing a quality life for you and your family. There is none.  An IBA client traditionally wants to sell for a reason external to the business, but does not need to sell.

    Recognizing that we cannot buy inventory to satisfy buyer demand as a business brokerage firm, IBA in 2018 added a Certified Franchise Broker, Curt Maier, to our team of knowledgeable, experienced, professionally skilled intermediaries.  Mr. Maier is affiliated with The Franchise Brokers Association (www.franchiseba.com) and represents for sale a high quality selection of the most successful and desired franchised business opportunities in the United States.

    IBA recommends individuals first evaluate businesses available for acquisition before exploring a franchise purchase because in our opinion the purchase has less inherent risk. The reasons entrepreneurial risk is diminished include that the business will already have an established revenue stream, profitability, trained, experienced staff, and a willing & able retiring owner able to provide quality, direct mentoring on how to successfully run the business.  However, if an appropriate business cannot be identified and successfully acquired the next best option is commonly to buy a proven business model in a franchised business opportunity.

    The following are four reasons why purchasing a franchise might be the right decision for an individual desiring to start a business:

    1. Location – One significant advantage of starting a business or buying a franchise is that you get to select the location. Motivations for placing a business in a specific community can range from identifying an unaddressed need to wanting to be part of a community to mitigating commute time.
    2. Industry – One of the criteria prudently used by banks when assessing SBA (Small Business Administration) loan opportunities is relevant experience. The resume of an individual wishing to be an entrepreneur will have a lifetime of accumulated work experience.   It makes sense to utilize this experience as an entrepreneur.  Finding a business to purchase that uses the experience can be problematic, especially when combined with a location requirement.   An easy problem solve is to buy a franchise in the relevant industry.  There exist quality franchises in almost every industry niche.  IBA has successfully resold franchises ranging from the Goddard School (Education) to Pirtek (Hydraulic Hose Manufacturing & Repair) to Arby’s (Food).  Curt Maier is currently working with an entrepreneur to buy a three-franchise package for the Seattle metropolitan area that utilizes her retail and fashion background.  Buying an existing business was not the best option for this individual to achieve her entrepreneurship goals.
    3. Opportunity – Successful entrepreneurship is about identifying an opportunity and executing a business model to satisfy demand with a return on investment. Franchises offer an opportunity to bring a new product or service into a community employing a proven business model. Significant financial rewards are often received by the first company to introduce a product or service to a group of customers.  Curt Maier is always on the lookout for the “next big thing” for the buyers he works with as a franchise broker.
    4. Support – The transition from corporate or military employee to entrepreneur can be scary. Working for a company or serving in the military there is always someone with more experience in your field available to use as a resource and sounding board.   There are also people available with diverse knowledge and experience in the organization that are responsible for elements of business operations outside of your sphere of influence.  A franchisor offers a similar infrastructure of support to their franchises.  A franchisor will train each franchisee on how to effectively operate their business model and frequently have support individuals in place to help with business issues such as facility leasing, website design, advertising, and material purchasing.  This support system can be the difference between success and failure for a first-time entrepreneur.

    The rewards of entrepreneurship are significant for those who are willing to take the risk and have the ability to execute successfully.   Acquiring an established, successful business is commonly regarded as the lowest risk entry point into entrepreneurship.   However, if an appropriate business cannot be acquired the next best option for a motivated individual is to buy a franchise.  IBA is unique in the United States in that our firm has the ability to sell both established businesses and new franchises.   If you are interested in buying a business or franchise in the Pacific Northwest, we would welcome the opportunity to talk with you.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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