There are many ways to become an entrepreneur. You can launch your own business from the ground up, you can partner with someone else, or you can even buy a small business outright. Buying a small business can create a unique stream of income and help you to launch your new career—you just need to know where to find them and how to invest. Buying a business, as opposed to starting something from scratch, can streamline your path to profitability. It can also be less risky, in some cases, if the brand is already successful and established. If you’re considering purchasing a small business, this guide will help. Learn where to buy a small business, as well as the pros and cons of different business types. Where to Find Small Businesses to Buy There are many ways to find small businesses to buy in your area or industry. You may want to try multiple methods to discover businesses so you can find the best option for your investing goals. Deal directly with the business owner. Are you looking to acquire a smaller company or competitor in your field? Do you want to enter a new industry or market? One of the best places to buy a business is directly through the other business owner. Do your research, and when you find a business that you want to pursue further, reach out to the owner and discuss the opportunity of purchasing their business directly.Hire a business broker. Business brokers work to connect small businesses with potential buyers—and vice versa. Their job is to understand various industries and company values. They can also provide insight into which businesses to avoid and share context into the history of various organizations. Find businesses online. Sites like BizBuySell and BizQuest allow small businesses to list their brands and connect with buyers. You can sort by industry, location, and even price. This is a great place to get a feel for your local markets and customer demand. You might also want to keep a lawyer on retainer to help negotiate the sale and handle various contracts related to the transition. This extra assurance can give you peace of mind and help you to protect your investment. Do You Want to Buy a Business or a Franchise? You don’t only have to look for small or local businesses to buy—it’s also possible to buy a franchise of an existing business and operate under that brand. Companies like McDonald’s, ACE Hardware, and Massage Envy rely on franchisees to buy into their businesses and operate companies on their own. Buying a franchise has its pros and cons, as explained by the Small Business Administration. One of the main benefits: support. There will be less decision-making because the brand and its processes are established and set. For example, if you decide to open an ACE Hardware, you’ll already know the brand’s color choices and the employees’ uniforms. You’ll also gain access to the company’s internal systems and marketing materials. While some people embrace the structure of opening a franchise, there are also limitations to what you can do. You can’t get creative with new products and must stick to established guidelines. This might not be ideal if you want to build a unique business or want more influence on the systems within the organization. You can find franchises for sale across almost any industry or company size. Different franchises have different license fees and varying startup costs. For example, it costs more to build an Anytime Fitness than a PJ’s Coffee stand. Some franchises require $250,000 or more to get started, but you can become a Lendio franchisee for $55k-$65k. To explore different franchise opportunities and costs, look at sites like Franchise Direct or Franchise Gator to learn more. These sites can help you to find the best franchises to own based on your budget and goals. Know Yourself Before You Buy a Business You may be tempted to buy your favorite bar that can’t afford to stay open or invest in a bakery based on your passion for cake design—however, it’s important to be realistic about what you know and what you can handle. There are a few key factors to consider with your business choices: How much time do you have to run this business? Are you looking to acquire a company and run it day-to-day as a full-time job, or do you want to be a silent partner who is more hands-off? You may want to look into a business investment rather than exclusive ownership if you don’t plan to be involved in the operations of the company. What is your expertise in the field? How much do you know about the industry, the current local market, and the business plan of the business you want to acquire? Think about the “cupcake bubble” of the past decade, where the market became too saturated with cupcake shops as the trend faded. You may need to spend some time learning about the industry before you enter it. What is your expertise in business? Even if you have industry experience, you may need additional business acumen to succeed. Take steps to bolster your accounting, marketing, HR, and management expertise to prepare yourself to lead your employees to success. How will you fund the investment? You can absolutely follow your dreams of becoming a business owner, but you need a funding plan first. Look into a loan to buy a business and other professional funding options—this way, you’ll have enough money to acquire the company and make any modifications needed. You don’t have to have an MBA or 10+ years of experience in a field to buy a business. However, you will need a plan to manage your finances, operations, and marketing as soon as the business becomes yours. When is the Right Time to Buy a Business? Buying a business can be an excellent way to get started in the small business world or to expand your existing operations. Benefits to this approach include avoiding the hassles of infrastructure-building and immediately accessing the value that comes from an established client base. You have 2 primary options: buying a standalone business or buying into a franchise. With the former, you gain complete ownership and full control of the operations and business decisions. The franchise model provides a host of resources and powerful support, but you’ll also lose autonomy. You may also find that corporate headquarters often determines many aspects of your business. Carefully consider the pros and cons of both these routes—this way, you can identify which option best aligns with your goals. What About the Timing? That’s a great question. There’s never a perfect time to buy a business. “Realistically, it’s not about timing—it’s about you,” says entrepreneurial guru Brian Scudamore. “Only you have the power to create your own success story, and that takes a certain type of person. It takes grit, it takes guts, but most of all, it takes vision. You have to be all in, and you have to really see the big picture. Starting and growing a business is always going to take hard work, rolling up your sleeves and putting in the hours…Sure, it’ll be scary and there will be a huge learning curve, but the time is going to go by anyway…so where would you rather be a year from now? Still daydreaming about being your own boss, or 12 months into building the life of your dreams?” Are you ready to make it happen? Are you confident enough to put your all into this decision? Before you answer these questions, you need to formulate a plan. Creating a Plan for Buying a Business There’s no way to proceed confidently with a business purchase unless you have a plan. And the process of creating your plan will make it possible to determine whether or not the timing is right for you. The best way to build your business plan is to answer questions related to your motivations and goals. Here are some possible questions to think about: What’s driving you to buy a business now?How much experience do you have in the industry?How passionate are you about the industry?What’s your mission statement?What’s your main objective?What are your primary strategies?What has your market analysis revealed?What has your competitor analysis revealed?What will your financial needs be?What are your financial projections? You won’t have all the answers up front—research and review will be required for clear answers. But you should start the process now in order to proceed when you feel the time is right. “Research and analyze your product, your market, and your objective expertise,” explains a business report from the Houston Chronicle. “Consider spending twice as much time researching, evaluating, and thinking as you spend actually writing the business plan. To write the perfect plan, you must know your company, your product, your competition, and the market intimately.” Once you’ve compiled your business plan, you’ll be able to confirm your choices regarding timing and whether you should buy a business or take the franchise route. A business plan is a living, breathing thing—you’ll want to revisit it regularly to make sure it reflects your current situation and aligns with your future goals.