So you are buying a business for sale — do you know if this is a seller’s or a buyer’s market, currently? Are you able to tell the difference between these two? Is it important to try and buy when the market is approaching its peak, or when there are likely to be plenty of “bargains” around for you to pick and choose from? Is it possible to look at the purchase of a business as you might look at buying shares on the stock market? Entrepreneurs who are very experienced in the market will tell you that they like to buy business assets according to a predetermined plan and that when they are used to doing it this way, that they can do it without a lot of effort on their part. However, if this is all new to you, as it will be for the majority of business buyers this year, the marketplace can be very confusing indeed.
It’s sobering to realize that the vast majority of potential business owners quit before they get to the finishing post. They fall victim to the “paralysis of analysis” and are ill prepared for the journey. As we all have so many distractions and other interests to pursue, we likely do not have the luxury of time on our side. Can you believe that some people take more than a year to look for what they believe to be the perfect business, but they’re not really prepared well enough and not likely to find that real gem. This is because they’re not sure what they’re after and are setting themselves up for a fall at the very beginning.
Before you decide that you are going to buy a business, you need to make some crucial decisions. Don’t think that you will be successful in any niche as in truth, you will fail in the majority of cases. It’s important to realize this before you set foot into the market. We may all consider that we are tenacious and will not stop until we find what we want, but if we make a couple of false starts early on during the process, we are more likely to end up as a statistic alongside the path to entrepreneurial prosperity.
Identifying your strengths and talents may be a rather pleasant exercise; identifying your weaknesses not so much. It is very important to choose a niche that has an attraction for you. This doesn’t mean that you have to be an established expert in that area at all, but enthusiasm will go a long way. Do not underestimate the level of enthusiasm that you need, because when the pressure is on this will often determine whether you succeed or fail. You may well intend to employ the services of a general manager to oversee your new business asset, but understand that you will have to immerse yourself into this organization if it is to succeed in the long-term.
You can find that perfect business for sale at any time in an economic cycle. Indeed you can find your ideal business in the most unlikely places, whether it is actually for sale or not. You need to come up with a plan of action, which is highly specific and based on your wish list of ideal businesses. Look at your history, talents, ability, likes and dislikes and anything else that is likely to make a real difference in your situation.
Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.
