The author ”Andrew Rogerson” wrote in his book “Successfully Buy Your Business: Expert advice from a business broker”
You have decided to buy your own business and obviously want to get it right your first thought is to talk to a few people in business ownership to see if they have some suggestions. Your next thought is to start reading some books and magazines and reading newspaper articles you previously didn't take any interest in. You start watching what they do at the businesses you go to and feel pretty sure this is something you can do. And you are right. This is something you can do. There are many variables to consider; practical issues such as what, where, how, and when with legal, financial, management, operational, and marketing questions. Then there are the emotional considerations with the highs and lows of getting started and sometimes being confused and overwhelmed.
Let's take a breath! What can we do to make our decision to buy a business successful and with as little pain as possible?
Must # 1:
Be patient with yourself you can make buying a business overwhelming just like anything else we do in life. Be comfortable that there is a lot to learn but it can be learned and what you need to know is finite. To help you, there are resources available such as SCORE. Small Business Development Centers, websites online you can easily find with a Google search using a key word, magazines such as Inc and Success, newspapers such as the Wall Street Journal as well as the business section of your local paper, and a wide range of professionals.
Must # 2:
One of the most important things you need to do is find your Buyer Profile. Your buyer profile requires you to look inside yourself to know the industry, business type, your business background and experience, what you enjoy doing and don't enjoy doing, your professional skill set etc. so you focus your energy on finding a business that matches your profile rather than looking at opportunities that don't and then burning out from the process. In Section Three we look deeper into your Buyer Profile to help you uncover where you need to focus.
Must # 3:
Use your gift! Before you look at all the different businesses to buy, see what you do easily and naturally to see if this can be the basis of your business. For example, if you were a dancer as a child can this be the basis of your business? Some options could include starting a dance studio for children, open a retail store that sells children's dance clothes, open a book store that sells dancing books, magazines, photos etc. Perhaps you had a gift for singing. Consider a business that coaches’ people to sing, retail store that sells musical instruments, a weekly newspaper that specializes in promoting singers, a website that sells records or material of specific singers etc. Reawaken your gift and see if you can buy an existing business and add your gift to the product range so it takes that business to the next level.
Must # 4:
This is my favourite. You've decided to buy a business so I would recommend you look at pulling a plan together. If you fail to plan, you plan to fail. Buying a business is a great idea but it needs to be accompanied by a plan. Although the planning process may seem unnecessary and tedious, it will benefit you in the future. For example, when you need to talk with an attorney about legal questions or an accountant about financial statements or to the bank to borrow some money, you need some structure dealing with these issues. Plus you can use the template of a business plan to keep you focused, show where you are and more importantly, where you are going. Your business plan should be a work in progress and constantly changes. If you want more information about using a business plan, please go to Section Seven.
Must # 5:
Recognize that when you buy your business one of your scarcest resources will be money. Therefore, the scarce amount of money you have must be spent wisely. Things can quickly eat up your limited capital so creating a budget and sticking to it is important. Further in this section there is a start-up expense planner, while in Section Three there is a Personal Budget planner. My recommendation is that if you are planning on buying a business, consider cutting back some of your current personal expenditure in preparation for business ownership. The discipline will hold you in good stead and will be one less adjustment.
Must # 6:
Buying a business comes with challenges. Find a way to motivate yourself and stay motivated! One of the best ways to do that is by using a Productivity Plan. This is talked about more in Section Seven but a Productivity Plan is a simple "To do" list of things you want done. This can be a great motivator as you can look back after two weeks and review what you did and see how much you've done since. You may make mistakes, but how else do you learn? The challenge is to keep going so the tide of success flows with you.
Must # 7:
Patience is a virtue - another great maxim we've all heard, but critically important if you are buying a business for die first time. Be confident, be determined, be energetic, but above all be patient. Buying a business has many challenges. It comes with uncertainty, lack of a support structure, no road map, and probably against our natural tendencies to look for reassuring guideposts Plus, the uncertainties are there to guide you. However, the professional and personal rewards greatly outweigh the sacrifices, plus the things we learn allow us to be stronger and financially secure for the next steps of our journey.
You have decided to buy your own business and obviously want to get it right your first thought is to talk to a few people in business ownership to see if they have some suggestions. Your next thought is to start reading some books and magazines and reading newspaper articles you previously didn't take any interest in. You start watching what they do at the businesses you go to and feel pretty sure this is something you can do. And you are right. This is something you can do. There are many variables to consider; practical issues such as what, where, how, and when with legal, financial, management, operational, and marketing questions. Then there are the emotional considerations with the highs and lows of getting started and sometimes being confused and overwhelmed.
Let's take a breath! What can we do to make our decision to buy a business successful and with as little pain as possible?
Must # 1:
Be patient with yourself you can make buying a business overwhelming just like anything else we do in life. Be comfortable that there is a lot to learn but it can be learned and what you need to know is finite. To help you, there are resources available such as SCORE. Small Business Development Centers, websites online you can easily find with a Google search using a key word, magazines such as Inc and Success, newspapers such as the Wall Street Journal as well as the business section of your local paper, and a wide range of professionals.
Must # 2:
One of the most important things you need to do is find your Buyer Profile. Your buyer profile requires you to look inside yourself to know the industry, business type, your business background and experience, what you enjoy doing and don't enjoy doing, your professional skill set etc. so you focus your energy on finding a business that matches your profile rather than looking at opportunities that don't and then burning out from the process. In Section Three we look deeper into your Buyer Profile to help you uncover where you need to focus.
Must # 3:
Use your gift! Before you look at all the different businesses to buy, see what you do easily and naturally to see if this can be the basis of your business. For example, if you were a dancer as a child can this be the basis of your business? Some options could include starting a dance studio for children, open a retail store that sells children's dance clothes, open a book store that sells dancing books, magazines, photos etc. Perhaps you had a gift for singing. Consider a business that coaches’ people to sing, retail store that sells musical instruments, a weekly newspaper that specializes in promoting singers, a website that sells records or material of specific singers etc. Reawaken your gift and see if you can buy an existing business and add your gift to the product range so it takes that business to the next level.
Must # 4:
This is my favourite. You've decided to buy a business so I would recommend you look at pulling a plan together. If you fail to plan, you plan to fail. Buying a business is a great idea but it needs to be accompanied by a plan. Although the planning process may seem unnecessary and tedious, it will benefit you in the future. For example, when you need to talk with an attorney about legal questions or an accountant about financial statements or to the bank to borrow some money, you need some structure dealing with these issues. Plus you can use the template of a business plan to keep you focused, show where you are and more importantly, where you are going. Your business plan should be a work in progress and constantly changes. If you want more information about using a business plan, please go to Section Seven.
Must # 5:
Recognize that when you buy your business one of your scarcest resources will be money. Therefore, the scarce amount of money you have must be spent wisely. Things can quickly eat up your limited capital so creating a budget and sticking to it is important. Further in this section there is a start-up expense planner, while in Section Three there is a Personal Budget planner. My recommendation is that if you are planning on buying a business, consider cutting back some of your current personal expenditure in preparation for business ownership. The discipline will hold you in good stead and will be one less adjustment.
Must # 6:
Buying a business comes with challenges. Find a way to motivate yourself and stay motivated! One of the best ways to do that is by using a Productivity Plan. This is talked about more in Section Seven but a Productivity Plan is a simple "To do" list of things you want done. This can be a great motivator as you can look back after two weeks and review what you did and see how much you've done since. You may make mistakes, but how else do you learn? The challenge is to keep going so the tide of success flows with you.
Must # 7:
Patience is a virtue - another great maxim we've all heard, but critically important if you are buying a business for die first time. Be confident, be determined, be energetic, but above all be patient. Buying a business has many challenges. It comes with uncertainty, lack of a support structure, no road map, and probably against our natural tendencies to look for reassuring guideposts Plus, the uncertainties are there to guide you. However, the professional and personal rewards greatly outweigh the sacrifices, plus the things we learn allow us to be stronger and financially secure for the next steps of our journey.