In this issue
Try this: Set yourself up to buy a business.
In the news: What happens if you can’t pay a tariff?
Tip of the month: How to find out about grants.
Try this: Look at businesses for sale
U.S. Bank released its annual survey of business owners earlier this month. One thing that jumped out to me? It found that 36% of Millennial and Gen Z entrepreneurs plan to acquire a business from a retiring owner.
It’s smart to consider that option. Buying a business instead of starting from scratch can give you a leg up in a few important ways:
A customer base. Acquiring customers is a huge effort for most new businesses. Existing businesses already have them. That means they already have revenue, too.
Existing operations. Building a team takes work, too. Existing businesses already have staff and relationships with outside vendors; you won’t have to start those relationships all over again.
The possibility of financing. It’s almost impossible to get a business loan for a brand-new company. Acquisition loans are much more common. When a business already exists, lenders can examine its track record to decide whether they believe it’s a reasonably safe bet. (You’ll still need to be able to qualify for the business loan based on your personal creditworthiness, though.)
That doesn’t mean it’s an easy route to success.
You’ll need to hire an attorney and an accountant to help you dig into the company’s history before you buy. Managing a new team and changing longstanding practices creates friction.
And if you go through with the purchase, you’ll face the universal learning curve of being a new business owner. You might find it’s not for you — 41% of Gen Z and Millennial business owners told that same U.S. Bank survey that they want to sell in the next 12 months.
If you’re curious, though, look at what’s out there. Sites like LoopNet and BizBuySell can give you a sense of what’s for sale and how much it might cost. Around Chicago, where I live, listings include everything from a company selling apple corers on Amazon (asking price $77K) to a snow removal business (asking price $400K) to a craft distillery (asking price $5M).
Lots of business sales happen privately, too. You’ll need relationships to learn about those deals, and you can start building those now. Get involved with industry groups or professional associations. Go to Chamber of Commerce or Women’s Business Center breakfasts and happy hours. All are great ways to get to know other business owners and community leaders who may have intel to share.
In the news: What happens when you don’t pay a tariff?
My colleague Ryan Brady wrote an incredibly helpful article this week about what happens if you can’t pay a tariff. Here’s what I learned:
A customs bond is required when you import a shipment worth more than $2,500. It’s a surety bond that ensures U.S. Customs and Border Patrol gets their tariff payment — whether it’s from you or the surety. As long as you have this bond, you’ll get your shipment. But you may owe interest, penalties or legal fees.
For smaller shipments, you need to pay your tariff within 15 days or they’ll be moved to a warehouse. To get them out, you may owe transportation or storage fees and a penalty.
After six months in a customs warehouse, shipments can be destroyed or auctioned off.
If you’re not shipping internationally yet, this might not affect you. But it’s important to understand what hoops you’ll have to jump through if and when you do.
Tip of the month: Your best chance at a business grant
Grant funding is the dream: no interest, no repayment and few strings attached. Unfortunately, it’s also rare. Most grants receive many times more applicants than they can fund, and most awards are relatively small. (Here’s our current list of national business grant opportunities.)
Your best opportunity to get a business grant might be to look local. Local governments often offer grant funding to businesses that meet specific criteria — for instance, facade grants that help update storefronts on certain streets. Many business accelerators host pitch competitions where winners get free office space, seed funding or some of both.
To find these opportunities:
See whether your local Chamber of Commerce publishes a list of local or regional grant opportunities.
Look for a city department with “development” in the title, like Planning and Development or Economic Development. That’s where grants related to business growth are most likely to be.
To find your local business accelerator, search for the name of your city and “business accelerator” or “business incubator.” These all have slightly different names, but tend to offer business advice, workshops, office or co-working space and accelerator programs.
