Becoming your Own Boss in 2021
According to Andy Cagnetta, CEO of Transworld Business Advisors, 2021 will be the year of entrepreneurship. After an unprecedented 2020, Andy believes people are taking their future by the reins and determining the most secure and stable way to move forward. For many, they are exploring the option of becoming their own boss. This might require stepping outside of your comfort zone. In this Q&A with Andy we explore the two options when considering this new career path: buying a business or buying a franchise.
Buying a Business
Q: Andy, for those that are interested in buying a business and being their own boss, can you share some insight on whether now is an appropriate time to do so?
A: Last year may have taught you that you are ready to control your financial future by purchasing a business. Owning a business is the greatest way to build wealth and take charge of your own destiny. The biggest question I’m getting now is whether it’s an appropriate time to make this investment. To be honest, there are plenty of reasons to be an entrepreneur, especially during a pandemic. Look at how many billionaires were made in 2009 and 2010!
Right now, we’re seeing a surge of businesses enter the marketplace that we wouldn’t normally see. This includes industries and business opportunities that are usually hard to come by. On any given day, businesses are popping up across various industries including accounting, agriculture, automotive, aviation, bookstores, catering, childcare, cleaning, construction, consulting, convenience stores, dental, dry cleaning, equipment rental, event planning, and the list goes on and on.
Business brokerages such as ours offer tools to potential buyers as they seek business opportunities. Transworld offers a free, buyer matching tool that notifies you when a new listing meets your personal business preferences. Your business profile includes key preferences such as geographic preference, business/industry preference, maximum price, down payment price, and minimum earnings. The biggest thing we encourage buyers to do is to educate themselves. Visit Tworld.com and sign up for the program to get matched with a business that fits your needs.
Buying a Franchise
Q: You mentioned that there are two options for those looking to become an entrepreneur – buying a business or buying a franchise. Can you expand on that and why one might explore the franchise route?
A: Some may feel that buying into a franchise will limit their growth, but it is the complete opposite. When you buy into a franchise system, you can grow bigger and better through the established franchise system than you would be able to do on your own.
Transworld Business Advisors began its franchising journey during the 2010 recession and now we’re navigating our way, stronger than ever, through COVID-19. We have found the franchising industry to be a popular avenue for people to explore as they navigate their future career path.
Like any franchise system, it is the franchise network that helps grow the company. Over the years, we have had better brokers and trusted advisors join our team. For us, the focus has been on technology, which is evolving faster and faster each year. Staying on top of technology and getting ahead of it helps make our franchisees and our brand more successful.
2020 Top Takeaways
Q: Looking back at 2020, what would you say were some key takeaways that will help you, your company and your franchisees grow and prosper?
A: 2020 was a wild ride but we learned so much that will help us in the future. Reflecting on 2020, we have compiled some key takeaways that I’d like to share with you. Each of these helped position our business better and will continue to do so as we move ahead. I encourage you to follow these too.
- People are important. The human connection is crucial in business and relationship building. Do what you can while being virtual and stay connected.
- Cash is king. Take the cash when you don’t need it because when you need it, it won’t be there. Run your business lean.
- Change happens fast. Sometimes you don’t know when and what will happen and for how long it will last.
- Sometimes surviving is winning. Unfortunately, there were some that suffered because of COVID shutdowns but they will come back. The restaurant industry is just one example. We also saw big winners during the pandemic that were able to pivot and survive.
- Small business is the backbone of the economy. Small Businesses generate 44% of economic activity. They are the driving force behind communities across the nation.
- It pays to be nice. Be generous whether you’re an employer, employee, vendor, etc. Understand the times and how it is impacting people.
- Use technology to our advantage & be more efficient. We’ve had technology at our fingertips but haven’t used it as best we can. While it doesn’t replace the human interaction, if used right, it can help businesses be more efficient. Balance is key.
- We have a much better idea of what the truth is. As a nation, we will get better at seeking the truth and understanding the truth. Try to understand what you need to know as a leader.
- Be more charitable and help your community. As leaders, it’s our role to focus on community development and be more charitable. If you’re winning and surviving, help those that are losing currently.
- Be grateful and live life to the fullest!
The Future of Buying & Selling
Q: Andy, you have mentioned that you think 2021 will be the year of entrepreneurship. What does the future of buying and selling look like? What should our readers expect?
A: I honestly believe that 2021 is going to be the best year to buy and sell a business. The business sale environment today is like no other and I believe that for several reasons, but here are a few:
- Cheap money. Interest rates continue to be at historic lows. Obviously on the buy side this will cost the acquirer less money in interest over time. On the sell side, the low interest rates allow borrowers to borrow more money on deals, thereby driving up prices.
- Buyers plentiful. In the 25 plus years I have been in this business I have never seen this level of buyer activity. Unemployment has driven many to consider buying a business or franchise as an alternative to getting another job.
- Solid valuations. Businesses values have mostly maintained or increased. This is due to all the above reasons and a lack of perceived safe investment choices. Buying a business for yourself is still a great way to make a return on investment.
- Landlords flexible. As commercial real estate vacancies rise, the rents have been lowered in some instances and landlords are more amenable to helping lease their empty space or making sure they lock in the businesses that remain. Buyers may have the ability to obtain favorable lease terms and perhaps lower rates long into the future.
Bottom line? 2021’s business sale marketplace will be unlike any other. Take advantage of the once in a lifetime opportunity!
Andy Cagnetta owns and operates Transworld Business Advisors, the world’s largest business brokerage and mergers and acquisitions firm with over 600 brokers in nearly 250 offices worldwide. The Transworld team handles thousands of business sales every year. To learn more about the buying and selling process, to find a qualified advisor near you, or to learn about franchising opportunities, visit Tworld.com.