2. How to Buy the Right Business. For You
The only way to make sure you will find success in your new business is to be absolutely sure you made the right acquisition, an ideal only reachable if you acquire and apply the necessary knowledge for this process.
Don’t worry, the vast majority of people have no idea what is right for them. The number of businesses for sale can be discouraging, which only complicates the choice of your future investment.
Here are some tips about how to choose a business that is right for you:
Stay Focused; Do Not Get Discouraged
During the search phase, it is easy to get discouraged when you see the large number of businesses available. Do not feel overwhelmed; approach this methodically. If necessary, exclude the businesses you absolutely do not want. For example, if you are not interested in a gas station, a restaurant, or a store, you will rule out a great deal of businesses listed online. Carefully look through listings, paying attention to profits, not just to the asking price.
However, keep in mind that these lists do not always reflect the clearest image. Ask for complete information about businesses that seem interesting. Arrange meetings with sellers. Prepare the questions that you will raise at these meetings. You cannot buy a business solely by relying its list description; visit the company and gather information from multiple sources. With each meeting, you will get closer to knowing what it is and is not right for you.
Develop YOUR Book of Golden Rules
Put together a list of five golden rules that any business of interest must adhere to. Be very specific when you formulate these guidelines and rely on criteria such as business type, size, location, employee number, operating years, minimum profits, maximum value, etc..
Do not base your decision only on the joy of coming to work every day. Of course this is important, but the emotional attachment to a company or industry will not be sufficient to reverse the devastating effects of a rash investment, which only brings financial loss.
Ideally, you would create your own book of golden rules before starting the search for possible investments. The rules may even slightly change during the search period. As you visit different businesses, speak to sellers and conduct your research, you may discover certain things that need to be added or deleted from your list.
The important thing to remember is that putting together this list as soon as possible is fundamental to your success!
„Whatever It Is That You Do Best…”
Next, get a true grip on your skills. Do not pretend to be something that you are not.
The golden rule here is: Whatever it is that you do best (sales, marketing, operations, manufacturing efficiency, managing employees, customer service, selling to businesses/consumers) must be the single most important source of revenue and profits of any business you consider purchasing. Repeat the last sentence once again; it holds the key to your success!
When interested in buying a business, one of the main goals is for you to be in control of your destiny. Do not put yourself in a position where if one employee leaves, you are in big trouble. Your skills must be the fuel that drives the engine.
The right business for you is one that will thrive on your strengths and not suffer from your weaknesses. Take a long, hard look at yourself. Picture yourself running the business. Of great importance is that you see yourself enjoying the business and your daily work. If you cannot, then there is just no way that you will be successful. The business that you choose has to be one that you will be proud to own.
Fall in Love With the Profit – NOT the Product!
Another key factor is to avoid falling in love with a product; rather, you must fall in love with the profit and the lifestyle that it can deliver to you. Many buyers start dreaming about all of the exciting things the product or service can do and, as a result, become delusional about what can realistically be achieved.
If the business does not generate the needed income or provide you with a satisfactory return on your investment, then the product that the business sells or the service it offers is meaningless in the overall scheme. Should this be the case, rest assured, you will learn to detest the product very quickly.
Conversely, a bland, boring product line can become very attractive if it enables the company’s growth, while you are enjoying the perks of a thriving business!
Above all, come and play. Once you have the right business, you will only look forward!