Photo by Austin Distel on Unsplash
Many of us have thought about owning a business before. To be your own boss seems great, as does the chance that you could make a lot of money. A lot of people enjoy the freedom it gives.
Some people start their own business, and some people buy businesses from others. If you are thinking about buying a business, there are a lot of things you should ask yourself. Here are just 4 examples of the many questions you should consider.
Why Are They Selling?
It’s hard to understand people’s true motivations for doing a lot of things. This can be the same way. You may never know exactly why a business owner decides to sell, but you should consider the situation under which it is being done.
Are they just wanting to be out of the game? Are the owners retiring? Is the business unprofitable? Some of these answers may be clear, and others may be a little harder to deduce.
Have I checked for issues?
Never buy a business without having a thorough check of the company’s books done. You never know if there was dishonesty or other issues going on.
Bryant Truitt, a certified fraud examiner specializing in dental embezzlement, suggests on his website that “transitioning the practice without a Certified Fraud Examiner’s thorough review of business systems is an invitation for trouble.” Don’t set yourself up to be the recipient of someone else’s bad choices.
What is My Plan?
I would venture to guess that many businesses fail due to lack of planning. The expertise may be there, the need for the business may be there, but the absence of a solid business plan can lead to disaster.
Make sure that if you are going to buy a business, you know from the beginning how you are going to run the business. Maybe even consider looking into business valuation experts. Make sure that you have taken into account tactics tried by the previous owner and learn from their mistakes and successes.
Is There a Pressing Need?
As cool as it would be to own a business, you have to be realistic about the need for the product or service. It would be awesome to own a scuba gear shop. It would not be as awesome if that shop was located in Arizona.
That is an extreme example, but many small businesses do a lot of their business locally. You have to be able to logically look into this situation and see what the need for your product is. Luckily, we live in a digital world, meaning that you could sell scuba gear from Arizona to people in Florida. Still, think about the need for your product and who would want to buy it.
Conclusion
Be wise when looking into buying a business. It could be an amazing opportunity, or it could be the worst decision of your life. Be skeptical when looking, but don’t close yourself off. This very well could be the decision that takes you away from the days of wearing a shirt and tie at the office.