Quick Tips on Buying a Business
Quick Tips on Buying a Business
Focus on what you do well. If making food is your strength, then you want to find a business that allows you to do that. Everything else like sales, marketing, finances etc. should have an employee or outside person to help or completely do those other functions. If you get too involved in things you do not do well or just too many things in general, the business will suffer and in turn, so will you.
Have a backup team in place. This group or individual should be available to help you out if the business does not come with the right employees to cover your weak points. This individual or team is best to be a business advisor or a small group of small business savvy people to be your brain trust while you are getting your bearings. Backup people will save you the embarrassment of taking a great business purchase and tanking it very quickly.
Determine if you actually need a partner. Partners can be a good thing but more often than not, they end up being a problem. If a partner is needed, make sure they have the skills to do a job different than what you are good at. Also make sure they will be able to contribute an amount of time, skills and money proportional to the percentage of the company will own. A problem in any of these areas will cause a major rift in the relationship and the business even of the partner is a family member. Don’t forget to make a partnership agreement also. Again, this is a must even if your partner is your mother.
Have a cash flow number in mind. Once more, it is good to love the industry that you are looking to buy into, but the money in your pocket will ultimately make you love the business. You don’t need to buy something solely because it has a huge cash flow (you also might not be able to afford it). It should either have the cash flow you need to pay any loans and yourself, or the ability to use your skills to quickly get it to that point and beyond.
Know how you will fund a purchase upfront. Both brokers and sellers do not want to deal with buyers who are planning on going after a loan once they finish their due diligence. Buyers will often be asked by brokers and smart sellers to show proof of funds before they even entertain an offer that will cause them to provide the buyer with confidential financial and other information.
Determine how much excess capital you may need. Beyond money to buy a business, you will most likely need some cushion money. Yes, buying a business gives you a running start, but it’s very likely that you won’t be running on a smooth track for the first few months after the transition from the seller.
Although there are certainly other points in the business buying preparation process, these quick tips on buying a business should get you off to a great start.
Quick Tips on Buying a Business - To learn more about this author, visit George J Sierchio's Website.
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Many people think that buying, or even starting, a business is purely based on being in an industry that you love. Although that’s a very good idea to start with, it won’t pay the bills. Below are a few simple things to think about while making your strategy for buying a business. These thoughts will be the key to being a good business buyer and subsequently a good business owner.
Focus on what you do well. If making food is your strength, then you want to find a business that allows you to do that. Everything else like sales, marketing, finances etc. should have an employee or outside person to help or completely do those other functions. If you get too involved in things you do not do well or just too many things in general, the business will suffer and in turn, so will you.
Have a backup team in place. This group or individual should be available to help you out if the business does not come with the right employees to cover your weak points. This individual or team is best to be a business advisor or a small group of small business savvy people to be your brain trust while you are getting your bearings. Backup people will save you the embarrassment of taking a great business purchase and tanking it very quickly.
Determine if you actually need a partner. Partners can be a good thing but more often than not, they end up being a problem. If a partner is needed, make sure they have the skills to do a job different than what you are good at. Also make sure they will be able to contribute an amount of time, skills and money proportional to the percentage of the company will own. A problem in any of these areas will cause a major rift in the relationship and the business even of the partner is a family member. Don’t forget to make a partnership agreement also. Again, this is a must even if your partner is your mother.
Have a cash flow number in mind. Once more, it is good to love the industry that you are looking to buy into, but the money in your pocket will ultimately make you love the business. You don’t need to buy something solely because it has a huge cash flow (you also might not be able to afford it). It should either have the cash flow you need to pay any loans and yourself, or the ability to use your skills to quickly get it to that point and beyond.
Know how you will fund a purchase upfront. Both brokers and sellers do not want to deal with buyers who are planning on going after a loan once they finish their due diligence. Buyers will often be asked by brokers and smart sellers to show proof of funds before they even entertain an offer that will cause them to provide the buyer with confidential financial and other information.
Determine how much excess capital you may need. Beyond money to buy a business, you will most likely need some cushion money. Yes, buying a business gives you a running start, but it’s very likely that you won’t be running on a smooth track for the first few months after the transition from the seller.
Although there are certainly other points in the business buying preparation process, these quick tips on buying a business should get you off to a great start.
Quick Tips on Buying a Business - To learn more about this author, visit George J Sierchio's Website.
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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