Purchasing a business is a big decision. It starts with choosing the right business for you. There are several things you should first consider to help determine what business may be a good fit for you. This exercise should be done prior to exploring the market for potential businesses.
Transitioning a business from one owner to the next can be complicated. However, by buying an existing business you can avoid some of the pain and costs associated with starting a new business. By considering the following topics you can have a more successful purchasing decision.
First, narrow down your passion and interests. Selecting a business in an area you are passionate about or interested in will help you jump in with both feet. Picking a business you have an interest in can help motivate you throughout the entire process and keep the momentum going as you begin running it.
Carefully evaluate what type of lifestyle you want. Owning your own business has a lot of dimensions. Consider the time, travel and commitment required. Some businesses require lots of travel, while others have little or none. Other businesses have odd working hours, not just a nine-to-five time frame. Yet still, some businesses are very hands-on requiring much time and energy. As a personal business owner, I have experienced the fluctuation of each of these factors. For myself, the most important facet was being able to set my own schedule and dictate my workload.
The next thing you should consider is the location of the business. Are you willing to move or would you rather stay where you are? Maybe, you are looking at an online business where you have the flexibility to live wherever you wish. Either way, keep in mind the location of your business will impact the labor pool, wages, taxes, and other expenses. This can change the business’s profitability greatly.
Are you interested in a small family business or a large robust company? While buying a bigger business may lead to higher profits, it is typically more expensive and a larger commitment. However, a small business may be more manageable but have poor financials and disorderly business functions. No matter the size, each will have pros and cons.
Lastly, what areas do you already have experience in? Choosing an industry where you have skills and experience will lead to greater success and less of a learning curve. Knowing your skills and expertise will help you eliminate unrealistic business ventures.
Buying the perfect business for you requires some thought and investigation. By thinking through each of the above points you can help eliminate businesses that are not a good fit and narrow those that are potential options. Finding out everything you need to know now will help you avoid buyer’s remorse.
Peak Business Valuation would love to help you in your purchasing process. We have contacts with several brokers across the country and provide business valuations to help determine a fair purchasing price. Questions are always welcome. Please reach out via email or phone call.