What is the best way to go about buying the right business? After all this is a big investment of resources, including time and money. It’s important to take every step to ensure that it’s the right business for you.
Understand yourself
Evaluate your likes and dislikes as well as your talents and experience. You will be investing hopefully for the long haul and will want to make sure this is the right business. Find a business that allows you to do what you like to do and makes the best use of your expertise, especially if you plan to run the business hands on. If you do not possess the expertise in a particular discipline but are still interested in that type of business, prepare to hire an expert in that field.
One question to ask is: am I planning to grow a business or just keep it status quo? As far as the type of work involved, decide if you would prefer staying inside all day or if you would rather be out marketing your product or service. Are you more of a people person or a desk person? Would you rather have very steady hours or are you pretty flexible? How are you at delegating or do you prefer to do all the work yourself? Determine how a particular business would fit in with your lifestyle, including your family into the mix. All of these factors will play a part in choosing the right business.
Evaluate Business Opportunities
In finding the right business, it is important to check several sources regarding a particular business, to be sure that you have enough information to make an intelligent decision. As you are evaluating several business opportunities, it is wise to keep good notes about each one. Always keep in mind your own strengths and weaknesses when trying to find a good business match.
It is also necessary to be comfortable with your understanding of how a particular business is run. How do they obtain customers? How are goods/services delivered? Obtain a decent knowledge of all parts of the business including equipment and inventory.
The Value of the Business
When selecting the right business you will need to understand the financial aspects of the business. Know how to value a business to see how much it is really worth. It is also important to understand cash flow. You must learn how to prepare a decent business plan in order to apply for funding and project future earnings. There are experts and training classes that you can tap into for assistance in this area. The more you learn up front, the better success you will have in selecting the right business.
Due Diligence
Take enough time to completely understand all the aspects of a business before making a final decision. It is imperative to thoroughly investigate accounting records and documentation. You may wish to enlist the services of an accountant to assist you in this area. Make sure you fully comprehend all that will occur at settlement and that you are receiving everything that you agreed to pay for. It is wise to have an attorney represent you.
Finally, the right business for you will be the one that most closely meets the criteria you have set forth after examining the whole picture.
