Buying your way into entrepreneurship can be an appealing option and mitigate many of the risks of “growing your own” when it comes to launching any business. Sticking your neck out to secure the startup capital, hiring the right employees, and establishing cash flow are just a few of the risks that send would-be entrepreneurs running away from the idea of starting their own business.
Buying an established business, on the other hand, comes with the potential benefit of instant growth and the ability to avoid the initial growing pains that often plaque startups. Furthermore, taking the reins of an already established and stable business can offer more personal freedom as opposed to the seemingly never-ending time and personal commitment that starting from scratch typically requires.
Should you acquire a Business instead of building it from scratch?
Here are some things you’ll want to consider before jumping into the role of business owner and operator
1.What type of business do you want to own?
Narrowing down the exact type of business you want to acquire is the first step. By identifying the business you think you want to be in doesn’t necessarily mean it will be a good fit for you. It’s imporant to be realistic and honest with yourself about the personal attributes, strengths, and weaknesses you bring to the table. We can help you doing a SWOT Analysis on yourself to identify those if you have trouble identifying them at first.
When evaluating specific businesses, it’s a good idea to consider the following important factors:-
- Is the business established and is there an existing customer/client base?
- Is the business profitable with healthy revenues and cash flow?
- Are the ownership and business demands a good fit for your lifestyle?
If these 3 criteria aren’t in place, you may not end up reaping the benefits you envisioned.
2. Are you ready to learn and devote adequate time?
In your role as CEO, you’ll need to develop expertise in many areas of the business. You’ll have to seek knowledge and recognize what areas you need to dive deeper into in order to learn more. You’ll also need to recognize professional weaknesses in order to quickly hire positions to bolster these areas where you maybe lacking.
3. Are you ready to be in charge?
Acquisition entrepreneurship means you’ll hit the ground running. This is a stark difference from traditional entrepreneurship where owners tend to “grow up” with their business, easing into its nuances and demands along the way, and bringning on team members one at a time. In the acquisition scenario, you’re immediately in charge. This means running the business and managing any existing employees from day one.
4. How to set yourself apart from other potential buyers?
If you’ve found a business that is truly successful, a good fit for your skills and lifestyle. and that is for sale, you won’t be the only interested buyer. It’s also important to remember that a successful business owner probably doesn’t need the sale. So if its not a numbers game, how will you set yourself apart as the best buyer for this successful business? You’ll need to persuade the seller that you’re the right buyer.
Often this comes down to showing that you care about and believe in the business itself. If it comes down to you, someone who believes in the culture and values of the existing business and infrastructure, and another buyer that is immediately looking to overhaul the business and change its culture, you may have an advantage. This, of course, depends on the mindset of the seller.
If you need help in setting up a successful business or don’t know how much to pay to buy a business contact us NOW:-
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