Buying the Perfect Small Business – Does it Exist and How do I Find it?
Buying a business is like buying a tailored suit or the perfect dress – you want it to fit like a glove and make you look your best! While there's no "perfect" when it comes to buying a business, checking in with what you can bring to the table will help you to aim for something as close to perfection as possible!
We've already identified that buying an existing business is a prudent choice. With the baby boomer generation nearing retirement, those in business for themselves will soon be looking to sell, therefore, creating a buyer's market and a bigger pond from which you can fish for your perfect fit. These businesses will be established on solid foundations, with credible performance histories, providing you with a low-risk opportunity to fulfill your entrepreneurial desires.
Before you get carried away daydreaming about business ownership, we advise that you set your search criteria to cover off the basics.
Geographical location – are you set on one area or do you have the flexibility to move?
Industry – do you have a preferred industry? In which sectors are your skills transferrable?
Income – how much do you need to earn? Can you afford to support yourself during the lean months in business?
Impact on your lifestyle – how much or how little are you willing to work?
Level of commitment – do you plan on being a hands-on owner-operator, or would you prefer a business with a management structure?
Price range – what's the outer limit of your affordability?
With these questions answered, you'll be one step closer to identifying the best opportunity for you.
To close in on the ideal business, it's also worth exploring some more personal elements. Being in business is like being in a relationship, you're going to spend a lot of time with your company, you want to be sure that you'll get along and bring the best out in each other.
Consider how you can add value, move the business in a new direction or enter new markets. Even if you're buying a successful entity, you want to know that there is scope for you to shape it under your hand and add your signature.
Get to know the company, the staff, and the vendor. Are these your people? Is this your tribe? Does the company align with your values and you with theirs? It will be hard to change the culture of a business, especially if the outgoing owner has been at the helm for 30 to 40 years.
Consider how agile you can be once in the hot seat. You need to be looking at ways to grow and improve from the outset; you can trust that your competitors are! Draw up a plan and consider how you'll execute your first months of ownership and how you will make them count.
The final exercise in your search, as with every significant purchase, is due diligence; the outcome of which will relate directly to how deep you delve into the nitty-gritty. Take this opportunity to gain clarity on every aspect of the company, have all your questions answered, and any concerns put to rest. You'll have signed a Confidentiality Agreement to get to this stage of the process, proving you are a serious buyer. You should have access to ALL information that relates to the business.
Once you have purchased a business, you can tailor it to suit your lifestyle, give you an income and enable you to achieve your financial goals. Of course, this will take time, but if you've done your homework and shopped from the right "rack", you'll be stepping out in the perfect fit and all your goals will be achievable.
Contact HHB Business Brokers to have a confidential discussion with one of our experienced brokers.