So you’re ready to make your dream come true? Starting your own business is just a beginning of a brand new chapter of your life. Starting your own business is a big step, most business owners find it challenging without the right help/ tools to know how, especially if it’s their first time. Keep in mind that it is always harder the first time, but the only way to get through it is with lots of research, comparison, studies and asking lots of questions.
Going into business for yourself can be challenging and it is a big commitment but with the right preparation and guidelines, you’ll wonder why you haven’t done it sooner. With these guidelines, it will help you think through all the aspects before deciding the right business for you:
- What’s right for you? It is easy to buy a business, but to run a business that you will actually enjoy is different. Finding the right business for you is always the first step. What do you see yourself doing? What makes you happy? Do you see yourself selling food every day? Or even outdoor equipments? How about fashion? All these questions that you’re asking yourself will help you decide which direction to take. Keep in mind, not everyone get it right on the first trial, sometimes it takes a wrong decision for you to make the right decision. But it's ok, any decision that gets you on the right track is always a good thing.
- Research, lots of it! Once you have an idea on which direction to take, research! Lots and lots of it. You have unlimited resources online that can help you. The easiest way to learn about your options is to research what’s available on an online business marketplace. This kind of site, like Bizcocity, offers a database full of available businesses in any area, which means that you can search locally or any other city if you are considering a change in location. Online market places offer tools to help you, such as “valuation report” or “compare listing” that will help you narrow down your options. A “valuation report” can provide estimates of the proper selling and buying prices for a business, based on comparable businesses, gross income and cash flow ranges. While “compare listing” helps you to compare a couple of your choices and to figure out the pros and cons of each choice you’ve made. Asking a professional, seeking the help of a business broker instead of buying independently can help you through the requirements you need to move forward. If you find yourself having trouble finding answers to your questions, ask a business broker. The experience they have in the business market will help you through all your unanswered questions.
- Once you’ve found a business that interests you, contact the business owner or the representing broker. Make sure to get the answer for all of your biggest questions about the business, such as initial asking price, rent costs, length of lease, number of employees, reason for selling and past performance. When asking about price, it is very important to focus on how much cash the seller requires for a down payment. You’ll naturally be curious about the asking price and how much money you can potentially make, but determining the down payment amount first is the key in knowing whether or not you can or would still want to continue with the buying process. If the business still looks good after getting all the answers you needed, ask to visit the business firsthand maybe even without identifying yourself as a potential buyer to make sure you are satisfied with its appearance and location.
- Negotiate! Don’t be shy to negotiate. Businesses generally increase up to 25 percent of the seller’s initial asking price; don’t settle for numbers presented to you at the start without lots of questions. Once you’ve got everything finalized with the seller and have all the information required, it would be a good idea to have outside professionals to validate them. A lawyer can help with all the necessary paperwork and notice any differences in the information that you might have overlooked. An accountant can review the figures the seller has provided and make sure they make sense.
- Most minor issues can be resolved, so don’t panic! Outside professionals will be likely to advise you to walk away from the deal unless everything seems perfect. Advising to buy a business is a big responsibility on them, they wouldn’t advise you on purchasing the business unless they feel comfortable themselves. As long as you get them to check out the numbers and paperwork and everything still feels right, it is safe to go ahead with the deal. It would be wise to put in a condition in having the seller agree to advise you at no charge for a certain amount of time (30 days in person and perhaps another 30 days over the phone is a fair amount). This will ensure that the previous owner will teach you what you need to know to run the business.
So there it is, once you’ve got it all, you are now ready to run your own business. Be prepared for changes, running your own business is a big step and change in anyone’s life. It takes a big commitment, it may look or sound hard at first but in the end, it will all be worth it.
Keep in mind that it is impossible to be 100% prepared when it comes to buying a business. But with the proper tools, research and help, you are just steps away from owning your own business.