How to Find a Business that is a Good Fit
Finding a business that is a good fit for you is very important before buying a business. As a business owner, you will be involved in the ins and outs of every piece of that business. Enjoying what you do at work is just as important as being happy with your personal life. If you hate what you do, you won’t put in the effort necessary to make it a successful business. Being passionate and knowledgeable about your business will bring confidence from your employees and success in meeting your goals. Below are items to consider when deciding on a business to buy. These points can help make the business a good fit prior to becoming a business owner.
Another important piece of buying a business is determining a fair purchase price. Peak Business Valuation provides business appraisals for individuals looking to buy a business. We want you to feel confident your business is a good fit both personally and financially. Schedule a free consultation today to get started!
Take Inventory of Your Interests
Imagine being asked to play in a professional basketball game when you’ve never touched a basketball before. That is what it would be like to own a business you know nothing about. Before buying a business, take inventory of your interests. What do you enjoy doing? If you can’t stand retail, don’t buy a business in retail. If you love biking, look into a bike shop, repair shop, or manufacturing company that creates the parts for the bikes. Humans work their entire lives, so make sure you dive into something you enjoy and are passionate about.
If you don’t know the industry but are interested, take the time to do your research. Learn everything you can about it. This includes talking to people who are in that industry. Do everything you can to gain as much knowledge about the product, company, and what a day in the life at that business would look like.
Know Your Budget
While the idea of buying a specific business may be appealing, it may be out of your reach. If you’re tight on cash, you will be limited to businesses you can buy. Finding a business that interests you and fits within your budget can be difficult. So, be patient with yourself as you work out the details. Discuss with a professional what your budget should look like with the inflow and outflow of cash you will have at hand.
Many individuals don’t know the benefits of buying a business using an SBA loan. Buying a business using an SBA loan increases your budget. SBA loans require as little as 10 percent down. This means if you have $150,000 to buy a business you could potentially buy a business that is worth around $1.5 million. SBA loans are great financing options for those looking to buy a business.
Peak Business Valuation provides SBA business valuations for SBA loans above $250,000. We are happy to connect you with SBA lenders or provide the SBA business valuation for your chosen lender. Set up a free consultation today!
Assess Needs of the Business
Some businesses may require more attention than others. Ask yourself, “how much time can I put towards the business?”. Before making your purchase, sit down with a business valuation professional to discuss the status of the business. This will help you determine the needs and priorities that need to be set. Be sure to also know the answers to the following questions:
- How much time does the current owner spend in the business?
- What is the cash flow of the business?
- How much is the business worth?
- What is the business’s financial situation? Debt? No Debt?
- How many employees are there? Do you need to hire more? Who are the key employees?
- Does the business have systems and processes in place?
Peak Business Valuation, business appraiser, answers many of these questions through a business appraisal. We work with dozens of individuals each month who plan on buying a business. A business appraisal gives you in-depth knowledge about the strengths and weaknesses of the business. A business valuation can also help you understand how much the business is worth. We are happy to answer any questions you have about buying a business. Schedule a free consultation to discuss these questions in depth.
Work With the Right People
If the business you want to buy is small enough, you won’t have to worry about bringing someone on to help you or obtaining financing. However, for most businesses, additional financing is needed. If this is your first buying experience or you are buying a business that is large, you will need help.
Bring people into your business that you can trust and who will work problems out. These are the people you will spend the most time with. Going into a business with family members can be a risky endeavor. If something goes wrong, can you work it out with them? Asking yourself the hard questions before you jump into something will save you heartache in the end. Be sure you have trusted people on your side before jumping into the buying process. This includes a trusted financial advisor, business valuation professional, and legal advisor.
Finding a business can be hard enough, but finding a business that is a good fit for your life can feel impossible. Take the time to analyze what exactly you are looking for. Go through this article and do a checklist with yourself before deciding on a business to purchase.
Working with the right people, finding a business within your budget, and doing something you’re passionate about will bring ultimate success and happiness. Passion leads to knowledge, so make sure you are looking into an industry that excites you and drives you to learn more. Just as you buy and wear shoes that are a good fit, you want to buy a business that is a good fit.
Peak Business Valuation, business appraiser, works with several individuals buying a business daily. We help buyers feel confident in the purchase price and in their decision to buy the business. If you are thinking of buying a business, give us a call today! We are happy to perform a business appraisal and answer any questions you have about buying a business. Schedule your free consultation today!
Schedule Your Free Consultation Today!