The New Year brings many resolutions; one of the top every year, however, is a change of career. To some, that may mean changing a job, but to others, it may mean entering a new business or becoming an entrepreneur for the first time. As, small business brokers, we represent many current and new business owners in Colorado, we have compiled the top five things every individual should know before they buy a business.
- Determine what you are looking for: Searching for a business that has 'cash flow' and is 'growing' is a pretty difficult process. Short of interviewing thousands of business owners there is no way to determine which businesses fit these criteria. Start with a more concrete qualifier instead. Do you want a business with high profitability? Low overhead? Established staff? Brick and mortar location?
- Narrow your search: Now that you have your determinants, research specific industries that you are interested in and compare them to your qualification requirements. If you want low overhead and a home based business, a restaurant probably isn't for you. You small business broker can help you narrow your search as well.
- Do some research: Read up on your target industries; know what typical industry statistics are when it comes to profitability, overhead, and staffing.
- Hire a broker: Yes, we are partial on this one but it's a simple truth. Just like you are an expert in your field, small business brokers are experts in buying and selling businesses. A business broker can provide you invaluable knowledge on current sales trends, businesses that are available for sale, and even find you businesses that are not yet on the market.
- Stick to your gut: You can spend years (yes, years) researching different opportunities. Stop wasting time looking at businesses that don't fit your qualifications, if something doesn't feel right from the start - trust your instinct. Say no, and move on.
Buying a business is a complicated manner. If you have additional questions, please contact one of our small business brokers at 720.259.5099 or email us.