Maybe you’ve always wanted to be an entrepreneur, or maybe you’ve just decided you are sick of working for someone else. Whatever your reason, the prospect of starting a business is exciting, but daunting. If you’ve looked into it, you probably know the statistics: 96 percent of small business startups fail in the first three years. Who wants to risk those odds?
Fortunately, there is a better way to become your own boss, with a much higher success rate. You can buy an existing business and skip the startup struggle. Sounds great, right? Before you plug “business for sale” into your favorite search engine and start looking for offers, there are a few things you should know.
Buying a business is a process, not an event. If you head into the process without knowing what you’re doing, you negate the advantage of buying versus starting from scratch. Here are 10 tips to help you navigate the business market and pick a winner:
1. Do some research into the process of buying a business, and educate yourself on the steps you will have to take. Don’t rely solely on advice from an attorney or an accountant. You, the buyer, must know what is involved so you don’t get suckered.
2. Don’t start looking for businesses for sale, and then narrow your choices down according to what you find available. Instead, identify the type of business you’re going to run and look for those types of businesses for sale. This will save you a lot of time in the initial stages.
3. Speaking of the business you’re going to run, identify your strengths and weaknesses and let them determine your choice. It’s good to follow your heart, but sometimes the business you dream of running is not the best one for you to buy. Be honest with your self-assessment.
4. Prepare your personal financial statement beforehand. You will be required to produce one at some point. Don’t forget to check your credit report and rectify any mistakes.
5. Determine your investment level. Know exactly how much you’ll be able to invest yourself-don’t rely on friends or relatives who have “promised” to invest with you.
6. Your main objective should be to negotiate seller financing for a good part of the purchase price. However, you should consult an SBA (Small Business Administration) specialist to research all possible avenues of financing. The SBA provides loans for all types of entrepreneurs.
7. If you have a spouse and/or immediate family, make sure they’re on board with your vision of buying a business. Successful entrepreneurs have the moral support of those closest to them.
8. Consider using a business broker to help you with your purchase. Be sure to do your research and choose a reputable broker, and don’t rely on the seller’s broker to provide unbiased information.
9. Don’t be afraid to say no if you enter into negotiations and discover the business you’re looking at isn’t right for you after all. It’s better to temporarily hurt someone’s feelings than to be saddled with a business you hate.
10. The average business buyer spends 18 months looking for and buying a business. However, it is possible and feasible to complete the process in 6 months. Commit yourself to a deadline for buying (not just looking) and set aside at least 10 hours per week dedicated to the process.
It’s more than possible to realize success in buying a business. Do your homework, make smart decisions, and cultivate your patience and observation skills, and you can become a business owner without the startup hassles. Happy hunting!
To read about flying fox bat, groundhog hunting and other information, visit the Interesting Animals site.