Buying a Business

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Of all the ways in which we can become financially independent and successful, owning a business is the only real means to acquire significant wealth. More effective than property, shares, gambling, or working as an employee – owning a business is the most rewarding, most satisfying and immediate means to creating wealth.

The decision to buy (or start) a business is one of the most important decisions ever undertaken. The importance of this decision warrants the most careful planning, attention to detail, and professional consultation.

Following are some of the points covered in the free booklet “Twelve Tips for Business Buyers”

Thinking About Buying a Business That Suits You

Think about all the things that you’ve done in your life. All of the different jobs, the people you’ve worked with, your hobbies. All of these things have shaped your decision to want to buy your own business. These experiences can help to decide 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 top of your mind. Then focus on exploring business opportunities that fit in with these experiences; and capitalise on your expertise by applying it to a relevant business type.

Ask yourself "Am I a conservative person? Or am I an Entrepreneur?" The answer to this question will help you to decide what kind of business to buy. Conservative people usually do best in businesses like newsagencies, post offices, child care. Entrepreneurs usually succeed in restaurants, marketing, service industries, and trading opportunities.

Understanding and clarifying your reasons for buying

Most people look at buying a business for financial reasons - to replace a lost income, to “buy a job”, 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 best reason for buying 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 many different benefits that will flow to you.

The only real way to acquire significant wealth is through business ownership. Using a business platform to achieve this over time with the right motivating factors can be an enriching experience.

Financing Your Purchase

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

Procrastination - the success killer!!

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 brokers will tell you that up to 90% of all 'buyers' who make enquiries 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 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.

Starting from scratch or buying a "going concern"?

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.

A time frame to find the "perfect" business.

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.

Selling