Buying a Business

"The best way to get rich is through owning and running a business not shares, not stock, not currency trading but through your own business" - Ed Pandavis.

 

Most people who make a decision that they want to own and operate their own Small to Medium Sized Enterprise (SME) are generally unprepared (especially if it is their first business) for the challenge of finding the right business for their current and future lifestyle. It’s so easy to focus on the here and now and assume that the future will take care of itself. But life and business in particular doesn't work like that.

 

The dynamic forces that shaped your decision to want to buy your own business, whether you are a first time buyer or a 'serial' buyer, can help to shape the type of business that will suit you and your lifestyle. The indicators are there within your life experiences - all you need to do is bring them to the surface so that they can be recognised for what they are; focus on exploring businesses opportunities that fit in with these experiences; and capitalise on this expertise by applying it to a relevant business model.

 

Understanding and clarifying your reasons for buying, most people buy a business for financial reasons - to replace a lost income, to 'invest' savings, to put equity "to work" or to spend an unexpected financial windfall. Buying a business for purely financial reasons is buying a business for all the wrong reasons. The only reason you should buy a business is because you are optimistic about the opportunity and excited by the prospects that the business will mean to you in terms of a lifestyle change because of the benefits that will flow to you because of it.

 

To 'back yourself' by putting your professional and financial destiny on the line is a critical step in the process and the only real way to acquire significant wealth. Using a business platform to achieve this over time with the right motivating factors can be an enriching experience.

 

Taking charge of your own destiny, helping other people utilise their full potential, striving for financial independence, dealing with challenges and growing as a person through acquiring knowledge should be your prime motivators.

Before you even begin to look for that "perfect" business, you should have a better than good idea about how you are going to fund your enterprise and what you need to fund your lifestyle. Ask yourself these questions and make a list of your resources:

You can 'shop till you drop' for the right business for you, but at the end of the day you must make a decision. Making any decision takes courage and most business brokerage houses will tell you that up to 90% of all 'buyers' who make inquiries (see section entitled "business Brokers") do not buy a business. Why? Because about one third don't have the money, one third don't have the ability and, more importantly, one third are procrastinators (in the industry called 'tyre kickers') who will look for ever for the "perfect" business but do not have the courage to make a decision.

 

Don't shop yourself into paralysis. Focus on what you are looking for. Spending all your time looking for things that are wrong, shields you from looking for what is right and what can be improved.

Just about everyone you will speak to when they know you are looking to buy a business will have an opinion on this. Many will say - "Start your own from scratch; why pay someone else goodwill - you can do just as good as them!!" Its true, maybe you can, but then again...

 

Many accountants will tell you that some new 'start up' businesses fail in the first 3 years. They are high risk during this period because the reality is that you can do everything right to get the business going but you just never know if your "dream" is going to be a commercial success.

 

With an existing business, you mitigate this risk because you have a historical track record. All the administrative and people and equipment oriented infrastructure and systems are in place allowing you to focus entirely on growing the business rather than creating a platform for growth.

The perfect business could best be described as a business that is low risk, is easy to run, has few if any problems and is one which offers unique products that are in high demand.

 

This business, the truly perfect business, like the perfect partner, does not exist. If it did, everyone would want it creating huge demand and subsequently inflating the price to the point that no one would want it because it was so grossly overpriced!!!

 

Remove any thoughts of finding the 'perfect' business. Make a commitment to yourself to find a "good" business within 6 months from TODAY.