Finding the Right Business to Buy
A lot has certainly changed since this time last year; therefore, so have the markets. And maybe you have decided it’s time to own your own business and do what you’ve been putting off for years. As a potential buyer or entrepreneur, it is important to understand which industries you might be interested in, what types of businesses find success in your area, etc., to find the right business to buy.
Buying an existing business already comes with several benefits. For instance, an existing operational and financial history (i.e., you are not starting from scratch) offers less risk. Particularly this past year, surviving businesses had to change and/or evolve to stay afloat during lockdowns and capacity limitations. By purchasing an existing business, you inherit this insider knowledge.
Of course, choosing the right business for YOU goes beyond surviving the pandemic. There are a few personal elements to consider and evaluate:
- What is your current lifestyle?
- What are your skills and strengths?
- What is your target market? In what industry? Have both factors been influenced positively or negatively by the Pandemic
- Where are you located? Where will your business be located?
- What are your price parameters?
First and foremost, do you already own several businesses? Are you hoping to add another to your portfolio? In this case, you may need to look for something that does not need much day-to-day involvement as you may already have your hands full. Or, are you free as a bird and looking for your next large project? In this scenario, a business that needs a more hands-on approach may be better suited for you. This goes hand-in-hand with your skills and strengths. Depending on your level of involvement, you will need to choose a business that falls within your skillset. Does it need help with its marketing? Are there operational or inventory issues? Is it a computer-based business or more consumer-facing? You do not want to get involved in a business that does not fall within your comfort or skill level.
Next, you need to consider what industry you’d like to enter – and therefore, your target audience, as well. Is this business within fashion and beauty or IT support? Although both can impact large groups of people, you should narrow down what your specific consumer might look like. Understanding this will help you best perform within specific marketing and sales parameters.
Finally, two essential things to consider that will also affect each other – location and pricing. Before you buy a business, think about whether you know and understand consumer preferences in your chosen market area or segment. Although you can virtually run a business from anywhere, is that the best option for you specifically? Keeping that in mind, location will also inevitably affect the business’ sales price. You need to figure out what you are willing to invest and how long until you may see a return on your investment (ROI).
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