Want to be your own boss? Do this first [CNBC]

There generally are two ways to becoming a small business owner:

You could buy an existing company, with its established customer base, stable of trained employees and proven cash flow.

Or you could start a company from scratch and bootstrap it – hopefully to success.

Starting from scratch may be best for the entrepreneur with a groundbreaking idea. On the other hand, those who aspire to make their own hours or seek more immediate cash flow may be better off taking over an established business….

“Buying a successful, existing business with proven cash flow and revenue history is almost always going to have a higher chance of success than starting from scratch,” said Bob House, general manager of and, which together feature 76,000 business listings for sale.

Financing a business acquisition can be easier because of the company's documented financial history and assets, said Jay DesMarteau, head of small business banking for TD Bank, though a lender would also evaluate the buyer's qualifications to operate the business and whether the company's success is dependent on the seller's involvement. Business buyers might also take advantage of seller-held financing, which may have more flexible terms.

Curated from Want to be your own boss? Do this first [CNBC]

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