Tips to Making Your Own Decisions When Buying a Business
is a life changing undertaking. You will be spending years of your life tied to the business – learning the ropes, refining its operations, improving the service or products, and operating it. You have to do a lot of research, due diligence and soul searching before arriving at a decision to buy. Should you buy the business?
Here are some useful tips to help in your decision process:
1. Find the right business to buy. Do not just rely on the cash flow or profitability of awhen making a decision. You have to be knowledgeable about the business or industry you intend to get into. Do you have the skills, training, experience or education in this line of business?
2. Listen to what the seller says, and what he or she does not say. The owner has invested much time, energy and money into the business. Although his or her advice is valuable, you should confirm everything the seller tells you about the business. Take everything with a grain of salt. Take what the seller says; note it down; do your research. Check the facts and review the books and operations. The business may not be as rosy as the owner wants you to perceive.
3. Visualize a long-term perspective. Picture yourself working at the company every day. Can you see yourself involved with employees, clients or customers and suppliers for the next five to ten years?
4. Can you improve on the business? Do you have plans for its growth or expansion? Can you add value to its services or products? Can your clientele or customer base grow?
5. Seek the advice of local business leaders in the same industry or business. Attend trade fairs and or industry organization meetings. Read industry publications. Do your homework; ask questions. Is the future bright for this industry? Is there room for growth? What are the trends?
6. Find out why the seller or owner is selling the business. Is the company losing to the competition? Will there be changes in its geographic location and vicinity that will impact the business? Will the business be still viable in the coming years?
7. Seek the help of professionals., lawyers and accountants can give you advice as to the available , valuation, financial health of the business, legal concerns, etc. These advisors work with you by counseling you on the history and status of the business, and by proposing changes in its operation system. They can help protect your interests.
8. Do you have the money to buy a business? Will you be able to get the needed financing? Will paying back the loan be workable?
9. You have to be patient and prudent. It takes time to gather all the information you need and to digest it. Do not rush and decide hastily. Take notes; list down the pros and cons about the. Weigh all the information you have. Do not be overly cautious, though, that because of your sincere effort to avoid making mistakes or jeopardizing your family’s savings, you defer making a decision. The right business for you may slip away.
10. Do not let fate control your destiny and think that if it is meant to be, you will get the business somehow. A successful entrepreneur has the ability and willingness to make decisions and accept risks that go with them.
Do not expect others – your family, advisors, friends and business partners – to decide whether a business is RIGHT for you. This is the decision only you can make. Are you ready to?