You’re ready to be a business owner. Should you start from the ground up or take a look at existing businesses that are out there for sale?
Starting from scratch is tempting. You have a great idea, and you’d be able to build your business exactly as you envision it. It’s also risky and significantly more work. What if it doesn’t take off?
Buying a business that’s already established can be a great solution if you choose the right one. It may cost more out of the gate, but you’ll gain (hopefully) a solid history of sales and a loyal customer base. So, what things should you consider when looking to buy an existing business?
First, do some cautious homework on what’s available. Searching online will provide you with a lot of leads, not all of which are legitimate. Ask people you trust and business owners you respect. Working with a broker can help eliminate some of the guesswork and help you sort out great opportunities from potentially disastrous ones. Brokers will get paid a commission, yes, but they can steer you toward businesses for sale that perhaps wouldn’t be known to you otherwise.
Brokers also take care of many tasks during the valuating, negotiating and finalizing stages of the sale. If you’re working without a broker, be sure that you have legal experts that can assist you in careful evaluation of a business to see if it’s really worth your investment.
Depending on the situation, you may have to come up with considerable amount of cash to buy an existing business. You’ll want to look at loan terms, potential investors or financing options to see which fits your budget best. Once you’ve secured financing, you’re ready to close and start putting your skills to work.
As you take over a business, though, resist the urge to jump in and give it a complete makeover! If you’ve done your due diligence, then you’re purchasing a solid business that makes money. Why start out making big changes? Watch carefully to see what works well and where you can put your spin on things to make it your own.