If you're going to do one thing right during the buying process make certain that you buy the right business for YOU! For most people, this is the biggest concern when it comes to buying a business. After all, on YOU can determine what business is right for you!
Don't be alarmed, most people have no clue. At the initial stages of the process, the amount of businesses for sale can be daunting; the choice enormous. If you find yourself unable to focus on a particular type of business or if you really have no clue what you want, but you do know that you want to buy a business then sometimes you have to work in reverse.
Start out by noting all of the businesses that you don't want. If for example you're not interested in a restaurant, gas station or retail store, you can probably eliminate 50% of all listings. Next, note the level of capital that you have a available as your cash investment. Then, write down, in order of priority, what the business must have in place (i.e. less than x number of employees, in business for 3 years, no weekends, high margins, exclusive products and or territory, etc). Check off these conditions against every business you consider.
Next, get a true grip on your skills. Don't pretend to be something that you're not. The rule here is that whatever it is that you do best (sales, marketing, operations, etc), must be the single most important driving factor of any business you consider purchasing. With business ownership, one of the main goals is for you to control your own destiny. Don't put yourself in a position where if one employee leaves, you're in big trouble. Your skills must be the fuel that drives the engine.
The right business for you is one that will thrive from your strengths and not suffer from your weaknesses. Take a long, hard look at yourself. Picture yourself in the business. Of paramount importance is that you must perceive yourself as enjoying the business. If you can't, then there's just no way that you can be successful. The business that you choose has to be one that you'll be proud to own.
Another key factor is to avoid falling in love with the product; rather, you must fall in love with the profit and the lifestyle that it can deliver to you. Many buyers begin to dream about all of the exciting things about the business and they become delusional about what can realistically be achieved. The product that the business sells, or the service that it offers, unless offensive in nature, is meaningless in the overall scheme. If the business does not produce the income you need, or provide you with a satisfactory return on your investment, then rest assured, you will learn to detest the product quickly. Likewise, a bland, boring product line can become very attractive if the business is growing and you're enjoying the work.
During the search phase, it's easy to become discouraged by the vast amount of available businesses. Don't get overwhelmed. Approach this methodically. If necessary, rule out the ones that you know that you don't want. Search through listings paying attention to asking price versus profits. Understand that listings do not always portray the whole picture. Send inquiries to the listed contact. Arrange meetings with sellers. Prepare the questions you need to ask. You cannot by a business from a listing. Visit businesses. With each meeting you'll get closer to knowing what is and isn't right for you. Above all, get into the game. Once you own the right business, you'll never look back!
|Get more expert advice in Richard Parker's How To Buy A Good Business At A Great Price - the most widely
used reference resource and strategy guide for buying a business.
|Richard Parker is the author of: How To Buy A Good Business At A Great Price, the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation - The Business Buyer Resource Center.|