3 Common Mistakes To Avoid When Buying A Business

Have you been contemplating buying a business lately? There are lots of opportunities available in Minnesota right now. The advantages of becoming a business owner are innumerable. Here are just a few:

• Being your own boss
• Gain independence to make your own decisions regarding your future
• Live and work in your passion

All too frequently, however, we've seen budding entrepreneurs miss out on their dream opportunity because they hesitated. It's a common mistake to avoid when buying a business. To help you work through some sources of hesitation, we’ve prepared this guide.

1. Self-Doubt

If this is your first venture into the world of entrepreneurship, it's understandable to question whether you have what it takes to be a successful business owner. But if you look back on prior work experience and previous responsibilities, you'll probably find that you've already demonstrated many of the skills required for becoming an entrepreneur.

It's also important to remember that you don't need to know everything about every aspect of running a business. Maybe accounting and bookkeeping aren't your strength, but you can hire someone with that expertise. It's not reasonable to expect that you, as the business owner, would be an expert in every area of business.

Additionally, the advantage of buying a business that's been around for a while is that the systems and departments necessary for it to operate are already in place. You're not building from the ground up, and you can learn from the errors and missteps that the previous owners may have made along the way.

We have found that what most successful business owners have in common is a drive to be successful and a willingness to learn and adapt

2. Waiting for Everything to Be Just Right

One of the most common mistakes when buying a business is waiting for certain conditions to be perfect. Sure, if you look hard enough you can always find something that suggests that this time isn't quite right, but the reality is that there may never be a time that’s absolutely perfect and if you wait for that time to come, the business you've been dreaming about may slip through your fingers.

The best thing to do is to get as ready as possible so that when the opportunity arises, you can jump on it and deal with whatever isn't 100% optimal.

3. Financing for Buying a Business

You may be thinking that you can't afford to buy a business right now. That may not be true. There are many financing options available that may be right for you.

• A bank or SBA loan: while the criteria to qualify for a loan can be stringent; it can be very beneficial. The SBA can guarantee up to 85% of the loan, depending on the amount borrowed and their terms are often more manageable.
• Seller financing: in some instances, a seller will provide a loan covering between 30 and 60% of the purchase price. When seller financing is in place, banks and other lenders tend to view financing such purchases more favorably.
• Rollover for business startups: you may be able to tap into your retirement savings without paying withdrawal fees or income taxes. In order to be eligible, you should have at least $50,000 in a traditional IRA, a 401(k), or another eligible retirement account. The process can be complex, so you may want to hire an independent company to provide some professional assistance.

You can consider other forms of financing such as personal loans, home equity loans, or borrowing from family or friends also.

There may never be a better time to pursue your dream of owning a business. Don't let hesitation rob you of the ideal opportunity. Visit our current listings to discover a wide range of businesses that are for sale now in Minnesota.