What to consider before deciding on buying or establishing a business ? These points should be addressed well before you even consider a particular business . Get your business mindset right first.
• Why am I going into business and can I do it?
This question is fundamental to ensuring you are starting out for the right reasons. It takes perseverance, motivation, and innovation to run a business. I liken it to hopping on the sky wheel and once your on its hard to just jump off. Make sure you are not doing it because you need a job but rather you want t embark on an adventure. Clients have embarked on something because they don’t have a regular income or been retrenched. Having a plan and reality check can save you financially latter.For those who know why they are going into business. Well done and may you have many years of business growth and success!
• Why buy an established business and not just start one from scratch?
Sometimes you maybe buying a headache! You may be better starting from scratch if you have the know-how and the availability and the plan. On the other hand, you may purchase a business because you can do it better than what there, it’s a great business that is already well run and has potential or because it has the asset structure, customers, etc. you can use to build your own frame work to build a business. You may consider how important staff will be in your business decision and will they be part of your 12 months settle in stage?
• Do I have interest and experience in what the business does?
Understand what the business does, where the customers come from and your passion to grow and manage the business. Buying business purely because the numbers stack up can be fatal if there is no drive or emotional buy-in by the owner. In another word, if you are buying a business to immediately to stick a manager in it, you may find it does work out the way you think it should.
• Is there a positive outlook for this type of business and what’s the competition like?
This is a big question that requires careful consideration. Buying a business in a market that is flooded with others can mean no sales growth or worst still a decline in sales. Some industries are declining. Check why the owner is departing. Do your research in the market in which the potential business is trading in. Is there a cliff just around the corner or an untapped pot of gold?
• Do I plan to buy and run the business on my own or with a partner(s) and others?
The size of the business may dictate the direction of this question. Being in partnership with any person, romantic partner best may, or a work college needs to be an evaluation. Each partners role should be set and roles defined. a good partnership agreement and a business action plan are well recommended if you are going into business with others.
• Can I afford to buy the business, and do I have personal and family constraints that may impinge on my ability to make it happen?
The business should be evaluated financially for the potential growth and decline scenarios. How much are you prepared to invest your financial capital, time and the placing of family assets as part of collateral to finance the business. A cash flow 12 months moving forward should form part of the due diligence in the business purchase planning
Place to look for a business include:
It is recommended that you spend the time to establish a clear direction of the type of business you wish to create or purchase. Plan to win and grow, and you will succeed . Having a clear pathway makes it easy when working through the many businesses for sale and determining the right one for you!
Please contact Geoff if you wish to discuss your needs . Geoff has helped many people purchase businesses