Businesses Bought and Sold

As with anything that is bought or sold, purchasing a business is based largely on perceived value.  It must be a good fit in the life of the new owner in ways that will almost always go beyond financial earnings.  Of course, it has to measure up to the standards set by lenders, but it also must satisfy lifestyle demands of the buyer, because as we know, and he or she knows, the purchase of a business will dramatically change the life of the owner.

As a seller, you may or may not choose to disclose your personal reasons to sell your business.  Again, as with selling anything, listing all the woes you’ve experienced with it will not help any prospective buyer to see the value.  Your lifestyle is likely very different from that of the buyer, and the parts that didn’t work for you might be just what makes it a perfect fit for him or her.

As they say, attitude is everything.  Focus on the positives in your business.  If asked, you may want to simply focus on the excitement of the new shining opportunity available to you and after all, one business at a time is enough, isn’t it?

The price your business commands is important, and as a seller, the higher the price the better for you, but beware of your personal attachment to it.  After creating it from the ground up, or just pouring yourself into it, and feeling it is a part of who you are, sellers are in danger of inflating the price they think is reasonable.  Think of your favorite hoodie sweatshirt from high school.  The edges were frayed, the hood was ripping, and the color was faded, but the value you perceived in it was still great – after all, it had been through a lot with you!  Hopefully your business is in better shape than your sweatshirt, but you see the point.  In either case, when it’s time to part ways it’s you and only you who calls that shot, just as it is the buyer, and the buyer alone who ultimately makes the decision to buy. 

Best of luck to both of you!

Choosing the right Business

There are many important considerations when choosing a small business to purchase – both to maximize your success, and enjoyment. Your personality, skills, risk tolerance and financial situation all help to determine what type of business will be suitable and successful for you. Too often, owners choose an inappropriate business, but by following certain guidelines you can minimize the chance of a poor selection.

Firstly, identify your existing skills and experience. It is usually far easier to successfully run a business which complements your knowledge and interests, rather than to learn everything from scratch. You should also take into account your personality and hobbies, as you want to buy a business which you enjoy. Recognize who you want to work with and communicate with – if you prefer not to manage employees, buy a business which can be run by you only. Also be aware of whether you would prefer to manage a service orientated or inventory based business.

You must also decide what type of business suits your lifestyle, in regards to commuting and time available. Some businesses may involve frequent travelling or a significant commute every day. However if you prefer, or are limited to staying at home, it is advisable to buy an online business. Due to advances in technology and communications, it is certainly possible to run a business in geographical areas other than your own. How much time you have available also dictates what is suitable for you – if you are interested in a certain business, be sure to investigate how many hours per week are necessary to run it.

Everyone has a varying tolerance of risk, and you must identify how much risk you are comfortable with, both financially and personally. Purchasing a struggling business and turning it around can be very financially rewarding, but also carries a high risk. Alternately, buying an established and proven business is a less risky choice, but may not yield any more than it is currently making. Generally it is recognized that buying a franchise is one of the least risky options, and best suited to those with limited experience and a low risk tolerance.

Finally, assess your current financial situation and goals. If you are looking to buy a business that will generate a large income, be prepared to potentially spend a large amount to purchase it. However if you are looking for supplementary income, a smaller, low-priced business may be ideal. Ensure you consult with an experienced professional before committing to any purchase.

Ultimately, you should purchase a business that matches your needs. By following the aforementioned steps, you should be prepared to purchase a business that is appropriate for you. In the end, you want your business to be one that you actively want to be involved in, and that you can grow and profit from.

Advantages of Buying a Franchise

With all the uncertainty in the current market, it can be a daunting task to start a small business. Starting your own small business from scratch carries many risks, and may not be feasible for the majority of first time entrepreneurs. Buying a franchise can eliminate numerous risks, reduce start up and ongoing costs, and still prove to be a great business opportunity.

Franchises have a proven record of success, and have created effective business models that can be easily applied by numerous people in a variety of locations. You are able to view the past success of the franchise company, and also contact current franchisees in order to make an informed decision regarding the purchase of a franchise. A franchise should already have strong brand recognition, which is particularly valuable when attracting customers.

Once you purchase a franchise, extensive training programs and ongoing support are almost always offered. Franchise company staff can help you deal with issues that occur while running the business, meaning that you are never alone. This is a huge bonus for those that are new to owning a small business, and can avoid stressful situations and costly mistakes. You should also be provided with marketing assistance, from budgeting to customer retention. Remember, the franchisor wants you to succeed and therefore will aid you as much as possible, as a poor result would reflect badly on the company as whole and potentially jeopardize their other franchises.

The franchise company will also often provide assistance when it comes to buying land for the new franchise, and during the construction process. They can regularly help negotiate superior deals on the sale of land, the selection of contractors and the obtainment of necessary equipment and supplies. The purchasing power of the franchise company as a whole can be extremely beneficial for you as an individual, and can also enable you to secure good deals for ongoing purchases.

A huge advantage of buying a franchise is the minimization of risk. A good franchise has a proven track record, provides ongoing assistance and allows you to compose more certain future projections for the business. Of course, you must still research and clearly assess the risks and rewards of buying a franchise, but for many it is a viable and practical option. It can also provide an ideal stepping stone to starting your own independent small business.