When starting a business, don’t forget you have a option to buy a business.
Buying a business can be a profitable and a faster return on invest than starting from the ground-up.
1.When buying a business, always approach with a positive mind-set and look for opportunities.
- Are the current business owners maximizing all opportunities in the market place?
- What’s the true value of the business vs the value of the assets?
- Are they spending marketing dollars in the right area?
- Are the employees well trained?
- Does the business owner have a database of leads and customers? If so, What is the size of the database?
- What’s the monthly revenue vs positive cash flow?
- What major upgrades need to made in the business? New software, equipment, training, etc.
- Does the business have any valuable assets that they are no longer using but can be sold fro cash?
- Look for missed opportunities and undervalued assets.
- Look at the financials. Is the bookkeeping up to date and are transactions properly recorded.
- Review prior year tax returns.
These are just a few things to consider.
2. Business owners will exit a business for a variety of reasons.
- Health challenges.
- Family challenges – divorce, need to spend more times with their kids.
- Relocation – A spouse may take new position.
- Retirement or mind set change – sometimes people want to just do something new and lose their drive to be a entrepreneur.
Buying a business can be a good opportunity for you to expand your business. You can buy a business, re-brand it, and expand your market reach.
When buying a business always consult with a professional (attorney, bookkeeper, CPA, industry consultant, etc.) There are many other things to consider but don’t be afraid to explore the possibilities.