You will have a long list of questions when you are looking into the possibility of buying a business. At present, you may feel that these questions alone represent an intimidating enough proposition, but additional attention at this point will aid you in deciding on the enterprise that’s best for you, and provide you with the best opportunity for becoming one of those unusually rare individuals who actually becomes a truly successful entrepreneur.
One of the first things that you should do is to consider your own abilities carefully. What are your strengths and weaknesses? You will honestly need to identify the weaknesses first, understanding how important these factors are, how you might deal with and overcome them and whether they represent a “showstopper” when it comes to certain categories of business. You will need to understand that to own a business requires a multitude of talents, some of which may be natural, others may need to be acquired and still more will dictate that you turn to professionals and advisers for assistance.
Ask yourself whether or not you’d like to deal with the wants and complaints of a large number of customers, and if you’ve got the people skills to regularly come in contact with all sorts of personalities. Are you a people person? Or would you be happier dealing with a business with a smaller number of clients who may represent a larger source of income between them?
When it comes to interacting with people, would you prefer managing a large number of employees, along with their individual requirements, schedules and personal issues? It might be that you’d prefer a one or two-person situation.
How many hours a day are you ready to give to the business? When you own a business, it usually ends up being an around-the-clock situation, and a lot of retail enterprises have quite long operating hours too. Would you prefer a 9 to 5 obligation?
Another important question to ask yourself – would you prefer a product or service based business? At this stage you should ask yourself whether you are happy handling large amounts of inventory or whether you would prefer to deal in a more intangible way.
Take a look at your strengths and weaknesses, again. Identify your areas of familiarity and whether you know a particular industry better than others. You may already be an expert within a particular niche, and when buying a business you should try and exploit every advantage that you have. Is there one industry that you are particularly excited about? It almost goes without saying that you should stay away from an industry that you don’t have any interest in, or dislike all together. Within your present and previous careers, is there a certain position that ideally suited you? If you’re inherently good at a particular role, look to purchase a business that allows you to capitalize on this situation.
Many people advise against this, but you could consider turning your hobby into a business. On the one hand, you will be especially motivated if this is something that you really like to do. Some would advocate that additional stresses and pressures involved when you own a business based on your erstwhile hobby will quickly lead to you losing the interest and passion that existed before. However, rarely does a hobby qualify you to run that type of business and so making sure you have the right skills to be successful are far more important than having a passion for the product. After all, it is the profit, not the product, that pays the bills and builds value when you buy a business.
How much money do you have to invest, or how much money do you have access to? Value a business or two and ask yourself whether you would be happier buying a struggling and maybe undervalued business, using your particular skills and time to turn the enterprise around, or whether you are looking for a steady business that is profitable right now.
The right business is the one that meets all your criteria and you should be enthusiastic and passionate about your final selection. Make sure that you bring in trusted accountants and financial advisors, never let your heart rule your head during the decision-making process and buy a business that is right for you, for the long haul.
Richard Parker is the President and founder of the prestigious Diomo Corporation – The Business Buyer Resource Center. His celebrated materials, seminars and consulting have encouraged thousands of aspiring business buyers from around the World to pursue their dream of buying a business.
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