There is a lot to understand when you are buying a business. Not only do you have personal aspects of your life that must be considered, but also you need to make sure that you are making a wise investment and buying the business right. Whether you’ve bought a business before or this is your first time owning a business, here are some of the things that you should consider. Today, we are going to discuss what you should consider personally before you buy a business.
The first question to ask is, “Why are you buying a business?” Are you buying a business because you actually want to own a business? Or are you buying a business as a reaction to life’s or your personal circumstances. Before you take the plunge and buy a business, consider the amount of effort running a business can take and how much of your time this will take.
The next aspect of buying a business to consider is timing: Is this the best time to buy a business? Boredom is not the best reason for buying a business, unless you are the type that likes to take business-sized tasks as hobbies. Consider the time of year: Will this be a good time for you to invest and spend time on a business? Is this a good time of year to buy a business in the business’s particular market? Industry professionals say that if you always tend to see the world a little differently than others, you may be cut out to buy a business!
Who Runs the Business
The next question to consider is who runs the business both on a day-to-day basis and while you are away on vacation. Will you take the hands-on approach and run the business yourself, or will you have others work for you and run your newly acquired business? Also, if you buy a business, you must consider, who will run it when you are gone? Do you have someone who is business savvy and trustworthy to take care of your new investment?
When buying a business, you must ask if all the numbers add up. Are the business owners being “straight” with you? When you are considering buying a business, think like a banker: what kind of return will the business give you? You must weigh the risk with the possible projections.
Before you buy a business, you must do your research and find out if there are any “skeletons” in the business’s past. First, if it’s a brick and mortar-type business, look at what condition the building is in. Once bought, will you have to make massive investments to improve the business or make it safe? Other aspects to consider are, has the business ever been a crime scene, has the business been zoned, etc.?
A big part of the business is to consider the customers. First, who are the current customers and why do they frequent the business? How has the previous business owner treated its clients?Before buying a business, you must understand your potential customers and what the business has to offer.
Why is the Seller Leaving
An important question to consider is “Why is the seller letting go of his business?” Though you may not always find out why a seller is letting go of his business, when you buy a business in Raleigh, do all that you can to understand the seller’s intentions: Are they getting out for reasons such as retirement, health issues or similar reasons, or are they getting out of a bad situation?
Previous Sellers Investment
Sometimes a previous seller will finance part of the sale, instead of all the money you are using to buy the business coming as a lease from the bank. See if the seller is interested in investing in your purchase and their past business. If so, there is a good chance that the business you are buying is valuable and profitable.
Buy a Business with ENLIGN
If you feel that you want to buy a business, consider working with the business brokers of ENLIGN! We are confidential business brokers who are certified and have owned our own business. Contact us to find out more about buying a business with ENLIGN!