Small businesses are the backbone of our economy.
There are about 28 million small businesses in the United States. These small businesses are the fabric that holds this nation together and a crucial part of the U.S. economy. Just about everyone has a connection to a small business: your favorite coffee shop, a local bookstore or maybe your family owns a business. Whatever the case, the connection between business and community runs far deeper than just dollars and cents. However, it’s these dollars and cents that fuel our economy.
According to the Small Business Administration, a government agency devoted to supporting entrepreneurs and small businesses, 54 percent of all U.S. sales come from small businesses, and, of the billions of dollars that flow through these businesses, 68 percent is recirculated into the local economy. When consumers spend money at large retailers, only 43 cents of every dollar ends up returning to the community. Patronizing small businesses helps local economies far more than buying at big-name companies.
Philanthropy is another area where small businesses trounce big companies. Local businesses donate two-and-a-half times more to charity than big businesses; this is yet another reason why small businesses help whole communities. Small businesses are a big job creator too. Not only do small businesses provide 55 percent of jobs, but, since the 1970s, they have also created 66 percent of all new jobs. In an era where big corporations are constantly downsizing, Main Street is hiring!
National support for small businesses is growing too. Since 2010, the Saturday after Thanksgiving has received the designation of Small Business Saturday. This day is an antidote to the chaotic Black Friday. In its six years of existence, Small Business Saturday flourished into an important day for local commerce. In 2015, the National Federation of Independent Businesses reported one-day sales of $16.2 billion for Small Business Saturday, up 14 percent over 2014. The United States Senate unanimously voted in favor of establishing Small Business Saturday as an official event each year.
Additionally, 551 officials in all 50 states promoted Small Business Saturday. Given that every level of government and about 100 million Americans actively support small businesses, now is the best time to join this growing part of the U.S. Economy.
Ask any of the 28 million-plus small business owners why they decided to work for themselves, and a few common themes will become immediately clear. According to the NFIB, the opportunity to pursue a passion is the No. 1 reason to own a business. To me, these business owners are pursuing their WHY — the reason to own a business is passion and financial freedom. Successful business owners also celebrate the freedom that business ownership allows. The key here is to build your business to work for you! Once your business is running like a well-oiled machine, you will have more time to spend with friends, family and loved ones. Freedom is a big WHY! Hand-in-hand with the freedom of business ownership comes the ability to be your own boss and work a flexible schedule. When you are your own boss, you can take time to watch your children’s soccer games, devote more time to exercise or take a long weekend with your spouse.
The explosion of small businesses started in the ’70s, as Baby Boomers began entering the workforce. Now, that same generation that built 28 million successful businesses is looking to retire. The beautiful thing about selling a business is that it creates a perfect win-win situation. Sellers win thanks to the retirement security, and buyers win because of the freedom that business ownership allows. The market is in a phenomenal place for buyers right now. Countless businesses with strong cash flows and great track records of success are up for sale. Go ahead and pursue the freedom you dream of; be your own boss; and buy a business.
5 Steps to Buying a Business of Your Dreams
1. Review your financials. Determine exactly how much money you are comfortable investing.
2. Determine how much income you need to generate on a monthly/yearly basis from the company. It’s always better to become cash flow specific rather than industry specific. If you want to make $300,000 a year, then don’t look at businesses generating less than that.
3. Discover your WHY. Why do you want to own a business? What is your ultimate goal for business ownership? Your WHY must be so powerful that it will keep you motivated and determined to obtain your goals. Your WHY will drown out all the negative voices in your head and from other naysayers.
4. Interview and hire an experienced business broker that will guide you throughout the entire process and ensure a smooth transition. Most good businesses are listed with business brokers for a multitude of reasons, but confidentiality is the No. 1 reason. Most FSBO businesses are overpriced and are typically not doing well.
5. Pull the trigger. When you find a business that meets your buying criteria, then pull the trigger and buy the business of your dreams. Grow your business; create new jobs; and contribute to the economy — and most importantly — give back to your community.