19 Mar How to decide what business to buy
You’ve decided the corporate life, the 9-5 grind, just isn’t for you. You’re tired of working for someone else and want to be your own boss. You don’t want to start from scratch, so you’d like to start searching for businesses for sale. Great! Congratulations! Now you can begin to answer the hard question: what type of business should you buy? There is no one answer for everyone. If there were, everyone would have the same business and no one would be successful. What works for one family or one person isn’t what works for another. Start with the following questions:
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How busy do I want to be? This question has several layers to it. First, do you want to be an on-site owner? Or an absentee owner? If you answered “absentee owner” then you want the freedom and time to do your own thing. There are many businesses that allow for such a lifestyle, and it’s good when you can narrow your options down that quickly.
If you prefer to be an on-site owner and more hands-on, the next layer to this question is HOW busy? 8-5 Monday-Friday busy? On-the-go restaurant/bar busy? Or four or so hours a day with time off for vacations busy? These are all possibilities, depending on the industry you look at, but answering this question helps you to begin to narrow your options. If you don’t want to be busy at all hours of the day then a restaurant might not be the best option for you.
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How big do you want this business to be? Do you want to grow it and perhaps expand it or are you looking more for a business that will provide enough for you and your family as is? Again, this harkens back to how busy you want to be, but also adds in whether you want the responsibility of employees and payroll, multiple locations, etc.
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What’s your passion? What industry is best for you and the area you want to live in? This takes a little more strategic thinking than it seems at first. For instance, you might think “I love camping and RVing. An RV dealership would be perfect!” However, owning an RV dealership means working probably 6 days a week. That doesn’t leave much time for YOU to go camping or RVing. So think about what you’re passionate about in relation to how busy you want to be.
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Let’s look at a scenario. You are passionate about alternative medicine but you don’t want to be tied down all the time. You want time to travel and explore. You see that a popular Alternative Health magazine is for sale and discover that it’s run by one person who loves to travel. This seems like a good fit! It’s a topic you’re passionate about, the workload isn’t all-consuming, and it already has a strong following.
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What skills are you bringing to the business? What are your strengths? Perhaps you see a listing for a small speciality retail store with the caveat, “With a little marketing effort this business could take off.” You know marketing is one of your strengths and this specialty retail store is right up your alley because you enjoy the products they sell! Your strengths and skills will add benefit to this business. On the other hand, if you know you’re not a great manager of people, a listing that says, “Current owner is on site 6 days a week” is probably not the best option.
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Finally, begin to think about your purchase price and terms. Are you interested in owner financing if that is a possibility? Consider, at this point, talking with a mergers and acquisitions group to help you with the buying process once you find a business you’re interested in.
Ready to start looking? See our current for sale listings here.