What should we ask ourselves when buying a business?
Buying a business can be one of the most exciting but stressful periods of your life. The issue many people will face is the pure emotion surrounding a purchase and this is where the inherent danger lies.
The first thing we need to ask ourselves is:
Do I really need to buy a business?
This is where emotion must be put aside. Are you selling yourself an impossible dream? Or are you following a strong business plan that suits your background, skills and future goals. Many people believe that buying their own business will fix all their problems; but purchasing a business has to be assessed on many fronts, not just the dream of being your own boss.
What do I expect from the business?
Ask yourself this question in combination with the need to buy. Are you expecting to reduce your working hours? Are you expecting to increase your take home pay? Are you following a passion or skill? Are you expecting too much or too little? This and many more similar questions will help formulate your decision and plan for your future business.
What can I contribute to the business?
When purchasing an existing business, it is good practice to ask yourself in what way you can contribute to the existing operations. Can you bring an enhanced skill or product to the business? Do you have the leadership or knowledge to turn around an underperforming business? Can you reposition yourself in the market and profit from a different niche? If you can’t contribute to the business, then why are you purchasing it?
Can I run it as well as, if not better than the original owner?
You may peruse the revenue and profit figures and believe you are purchasing a solid business. However you must be honest with a self-assessment on whether you can take over and run the business to the same standards as the original owner. This should be your baseline on predicting your future success.
If you can answer the above questions honestly and have this reflected in a plan, then you are more likely to purchase a business that suits you; and for the right reasons. Consulting experts, family and friends whilst making these decisions will help ensure a balance in your self-assessment. If you require any expert assistance surrounding a business purchase; contact us today at Alert Property Group.
