If you’re thinking of buying a business, there are a few basic factors that need to be considered. Check the following ten points to see if you’re ready to take the plunge.
1. Are you suited to running your own business?
Weigh up the pros and cons before deciding to go down the route of business ownership. To run a business successfully, you need to be able to motivate yourself and others.
While some people like to be in control of their routine and thrive on the challenges of running their own business, others prefer the comparatively structured and secure environment that paid employment can provide. Which are you?
2. Do you have a particular business in mind?
It’s important to have an interest in the type of business if you are to enjoy working at it.
You might already have a specific type of business in mind, or you may simply like the idea of being your own boss. Consider your personal interests and hobbies, as well as the types of business available. Don’t just concentrate on the economics and perceived profitability.
3. Do you have the necessary skills and experience to run a business in a particular field?
Take into account your personal strengths and weaknesses as well as your hobbies and interests.
If you have experience in a particular area then that is a plus. If you don’t, you will need to conduct some thorough research in the area. Talk to business owners in the industry to build up an idea of what is involved.
4. Do you understand your strengths and weaknesses?
As well as your skills and experience, it is important for any prospective business owner to have a sound understanding of the general areas in which they excel and those that they may need assistance with.
If you’re a capable teacher, you may want to consider a business where this skill can be utilised; if you’re a technophile, consider how this could be put to advantage.
5. Are you an effective manager of people?
You don’t need to be an experienced manager to take on a new business, but it helps if you have some idea of your capacity to manage people. Are you able to deal with potential problems that may arise, for example, employee issues or falling sales?
If finances allow you can hire a manager, but this may not always be a financial possibility, at least not to begin with.
6. Are you comfortable with taking risks?
If you are the type to be easily worried by changing circumstances and financial insecurity, you may want to reconsider the idea of business ownership.
Any prospective business owner needs to be comfortable with the idea of risk. Even under favourable circumstances, owning your own business can be a disquieting endeavour. If you have a family, you also need to consider their involvement and how your decisions will affect them.
7. Do you have the finance to buy a business?
Are you in a secure enough financial position to be able to buy a business without jeopardising your personal circumstances?
Whether through a loan or other options, you need to be able to raise the necessary finance. What are the financial options available to you? Are there businesses available for sale within your budget? Can you sustain a period with little or no income?
8. Are you constrained by personal circumstances as to when you can and can’t work?
Running your own business doesn’t always tie in with working regular office hours, Monday to Friday, 9-5.
Are there any times that you are unable or unwilling to work? You may not be able to work evenings or weekends, for example. Once you have identified the type of business you’re interested in, have a chat to other business owners about their schedules.
9. Are you prepared to put in long hours?
Frequently, building up a business takes a good deal of time and energy, which often means long working hours.
Many people go into business by themselves thinking that they will have more free time and more leisure to spend pursuing other interests. Unfortunately, it doesn’t always work like that. Many new business owners find themselves with complicated schedules and less free time than they had previously.
10. Are you willing to do your research?
Due diligence is fundamental to a successful business purchase.
Once you have identified the type of business that interests you, you need to start researching it thoroughly and methodically. Are you willing to network and find out more about the general industry? Things to consider include competing businesses, suppliers, and the legislative environment and legal responsibilities that go with a particular type of business ownership.
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