You might know that you’re ready to become a business owner, but you’re not sure about starting things from the bottom. Well, here’s the thing: you don’t have to. Indeed, an often overlooked route into business isn’t to start your own company, but to buy someone else’s. There are always businesses for sale, and buying one comes with plenty of benefits, including a list of customers! But before you jump into this, there are a few things to consider, which we take a look at below.
Follow Your Mind, Not Your Heart
You might think that buying a business is more fail-proof than starting your own company, and to an extent it is, but there are still risks involved. Just because a business might have plenty of customers now, that doesn’t mean they necessarily will in five or ten years time. As such, it’s important that you don’t make the mistake of following your heart and buying a business that you simply have an interest in. Treat it like any other company, and conduct thorough market research to ensure the future is as bright as the present.
Figure out the Problems
No company in the world is perfect, and never will be. However, though you’ll never be able to have a perfect organisation, you’ll need to know where the flaws are before you agree to the purchase. Some of the flaws won’t be a big deal, and you’ll be able to live with them; others might be so big that they can’t be overcome. You won’t know this, however, until you’ve educated yourself about what the problems at the company are.
Make Sure Everything is Above Board
You might think the person you’re buying the business from is the nicest person in the world, but it doesn’t matter what you think. All that matters is what’s going on behind the scenes and under the surface of the company. Before agreeing anything, work with a company that performs due diligence on businesses to ensure that no nasty surprises greet you once the purchase has been completed. During the due diligence, you’ll learn everything you could want to know about a company, which might just save you from making a decision that you’d eventually come to regret.
Get the Value Right
There’s a common problem when it comes to buying an existing business: getting the value right can be tricky. Ultimately, there are so many factors that contribute to a valuation that it’s difficult to say anything about it here, but needless to say, if your first offer is accepted without hesitation, then you’ve probably gone too high, too fast.
The Worst Case Scenario
Finally, one last step to take before buying a business: imagine the worst case scenario. What does it look like? If the risks of the purchase are just too great, then maybe rethink the process. However, if the gamble looks like a reasonably safe bet, it’ll be a good idea to continue and see what your business brain can produce!