Maybe you’ve always wanted to be an entrepreneur, or maybe you’ve just decided you are sick of working for someone else. Whatever your reason, the prospect of starting a business is exciting, but daunting. If you’ve looked into it, you probably know the statistics: 96 percent of small business startups fail in the first three years. Who wants to risk those odds?
Fortunately, there is a better way to become your own boss, with a much higher success rate. You can buy an existing business and skip the startup struggle. Sounds great, right? Before you plug “business for sale” into your favorite search engine and start looking for offers, there are a few things you should know.
Buying a business is a process, not an event. If you head into the process without knowing what you’re doing, you negate the advantage of buying versus starting from scratch. Here are 10 tips to help you navigate the business market and pick a winner:
1. Do some research into the process of buying a business, and educate yourself on the steps you will have to take. Don’t rely solely on advice from an attorney or an accountant. You, the buyer, must know what is involved so you don’t get suckered.
2. Don’t start looking for businesses for sale, and then narrow your choices down according to what you find available. Instead, identify the type of business you’re going to run and look for those types of businesses for sale. This will save you a lot of time in the initial stages.
3. Speaking of the business you’re going to run, identify your strengths and weaknesses and let them determine your choice. It’s good to follow your heart, but sometimes the business you dream of running is not the best one for you to buy. Be honest with your self-assessment.
4. Prepare your personal financial statement beforehand. You will be required to produce one at some point. Don’t forget to check your credit report and rectify any mistakes.
5. Determine your investment level. Know exactly how much you’ll be able to invest yourself