Buying and owning your own business is no walk in the park - far from it. From quitting your current job, or even balancing it alongside setting up your new venture, to putting in an extensive amount of groundwork before seeing any real benefits or a steady revenue stream, the journey to being a new business owner is surely an arduous one. No doubt there are some incredible pay offs: the prospect of being your own boss, working to your own schedule, and perhaps the biggest draw of generating a hefty profit, are all incentives to take the first step in becoming a business owner.
What may seem like a daunting proposition can be made easier with the help of a comprehensive game plan to help prepare you for the task that lies ahead. Here are three things to consider before beginning the journey of purchasing a business that you can claim as your own.
Is your head in the game?
The dreams of running your own company, and the realities of the situation, can often be polar opposites. So it’s fairly obvious to ask yourself if you’re being realistic in your expectations, and if you’re honestly ready to buy and run a business. Expectations can be managed by having a clear, research-fuelled plan which tracks expenses, input and projected revenue over varying periods of time, all fully backed by industry statistics or market research with a particular focus on the finances. It’s important to dream big, but remember that every journey starts with a single, small step.
You may also want to think about the risks from an individual perspective, in addition to the professional side of things. It’s worth thinking about how buying a business will impact your personal, social and family lives in terms of time management and finances, and if the potential gains truly outweigh the risks.
What to buy, what to buy?
Ensuring the success of your new business is mostly down to your dedication, passion, and due diligence. So, prior to purchasing, it’s important to know your own strengths and weaknesses to pick a business in an industry that you know and can thrive in. There is absolutely no substitute to research, and using your skills and past experience to grow a business is vital, especially if you’re starting small.
Consider the economic climate, and how saturated the market is for the business you’re buying. While no industry is safe from the effects of a recession, your business must be capable of ploughing through a tough patch and maintain a certain level of financial stability regardless of outlying circumstances. Get to know the market you’ll be buying into, and yet again do your research (or consult a professional) to evaluate growth across all periods of time.
The affordability conundrum
It goes without saying, but money is a central factor in the decision-making process. Depending on the type of business and the associated risks involved, some will require a higher level of investment than others. Paying rent for commercial or industrial spaces, equipment and skilled staff are all things to consider, especially if the business you’re purchasing offers a manufacturing or customer-based service, rather than simply being an online enterprise. Legal costs and interest rates on bank loans are also things to look out for when totalling up the costs of buying a business.
Assess your personal financial situation, the cashflow, fiscal risks and hidden costs before taking the plunge and investing your entire life savings into buying your business. Especially if you have family or other responsibilities to support, it’s best to take a fine-tooth comb through the money matters to know exactly what you’re getting into.