Diving into the world of business ownership takes guts, skill, and the ability to successfully carry out a well-developed business plan. But chances are, as an entrepreneur, you’ve got a lot of professional obligations already on your plate. The decision to buy an established business allows you the freedom to own and operate an organization that has already established itself in its community.
When you choose to buy an established business, the upfront cost may be significantly higher than developing a business from the ground up. But as compared to a start-up, established businesses have substantially less risk involved in their acquisition. Here are some important things to know before you make the purchase.
If you’ve discovered a business for sale that piques your interest, take your time and research the business itself. Doing homework ahead of time allows entrepreneurs to uncover any serious underlying issues that may not be apparent at first, or even second, glance.
There’s no harm in thoroughly researching a business and its history. Figure out how diverse their customer base is, and if the buyer’s personas have changed over time. If you’re purchasing a business and an existing building, consider the history of the building, and if it’s been well-maintained over the years or recently renovated. Buy a business after you know as much as you can about your venture.
Taking the time to research exactly why an owner is selling a business allows you to see if there is anything fundamentally wrong with a business. The reasons as to why a successful business owner would sellrange from innocent lifestyle changes to a major flaw in the business.
Before taking the next step in purchasing an established business, ask the following questions:
As an interested buyer, you can speak with the existing business owner about these possibilities, along with customers and surrounding businesses in the area.
Finally, consider the existing landscape of your potential business takeover. Thoroughly inquire about the existing customer base, and whether you have the potential to grow the business without completely rebranding or targeting another market. Scour the neighborhood or online community for local competition.
Study their business tactics, and recognize what they are not providing their customers with that you potentially could. Finally, going over the current business financials with the existing owner and your acquisition team will help you make a strong and confident decision as to whether buying that business is in your best interest.
Transworld Business Advisors of Minnesota want to help you successfully acquire the business of your dreams. For more information on available businesses, visit our listings to find the right one for you.