Buying a business is without a doubt a multi-step process. However, the steps do not merely begin at the point of research for businesses for sale or making an offer, but rather, in deciding what kind of business is right for you. There are a number of personal factors to consider when coming to this decision; keep in mind these five factors when picking the right business for you to buy.
The first thing to ask yourself is, How much time do I want to focus on building the business?
This is relevant because you can choose to start your business from scratch - building it from the ground up or you can choose to purchase a franchise. There are definite advantages to both, but the right one for you lies in how much creativity and flexibility you would like to have versus how much you would like to have already established for you, i.e., customer base, marketing methods, etc.
Building a business, whether it is from scratch or not, requires certain investments. The first step is to establish a budget from within your means in order to determine the type of business you can afford. Once you have done this, you can have a meeting with your business broker to narrow down your options and pursue the right business for you. This budget can be for either seed money to begin a business or for the price of an existing one.
Location, location, location! Managing a business in a different city or state is not only difficult, but almost impossible. Unless you have an existing team whom you trust to oversee a business for you in a new location, you should focus on purchasing a business in your neighborhood. Once you have determined the kind of business you are looking for, you can research the preferred area by demographics of potential customers. Make sure the type of business you’re interested in would be lucrative in your market.
In some cases, location is not even a factor to consider because you may be able to run your business from anywhere using e-commerce. For example, do you have a hobby or personal interest that can be easily translated into a home-based business? From calligraphy services for wedding invitations to paintings and personalized jewelry crafting, is there a skill you have mastered that can turn into your next business endeavor? If so, this might just be the angle to pursue. With the help of a business advisor, you can file the necessary paperwork to begin operating as a business in your state. If you’re looking to buy an established business, your professional background and experience may influence your decision in terms of the type of business you choose to pursue. The closer your experience and background is match for the business you want to buy, the less risk and greater chance for success.
Last, but certainly not least, industry trends are important to research and understand before determining if a business is right for you. Before purchasing a business, you need to establish the kind of customer base you are hoping to reach. Not only does the service or product you are selling matter, but so do the customers, where they live and how they are willing to spend their hard-earned money. A business broker can help you not only choose the industry you would like to pursue but also understand its market trends and how to be successful in it.
All entrepreneurs reach a moment in their lives when the pursuit of a new business is strong. The decision of whether to begin a new one from scratch or purchase one can be a long-winded process, or made overnight, depending on what you find when you start looking. If you are at that point in your process where you would like to purchase a business but are unsure of how to find the right one for you, contact Transworld Business Advisors today for a free consultation!