Buying a Business: Avoiding the First Year Glitch
There are too many risks that go with starting a new business. There is overwhelming evidence that shows a large percentage of new businesses do not make it past their first year of operation. You are better off buying an already established business.
This presents you with fewer risks and an income source the moment it is yours. A new business would have needed you to plough in a considerable amount of money before you start seeing any of it in return. Since you are not that well known when you have a new business, you shall take a long time to make an impact in the market. The staff present will also know their duties well, which saves you from all the training you would have had to do.
This does not mean you should go for the first opportunity you get to buy an established business. You need to find out more about them before choosing any. You need to find out what your skills, interests and financial resources are capable of. You need to also think of buying a business dealing with products and services you are familiar with. A good reference scenario is that of a person who has worked in the pharmaceutical industry venturing into the drugs selling the business.
You need to also think of doing business in things you enjoy. You shall be spending so much of your time in this business to make it a success. If you cannot stand the area in which the business is based, those shall be many miserable hours.
Research is one of the most important things you can do when it comes to the business you wish to join. You should have figured out the kind of business you do not mind spending time doing. You need to then figure out your professional skills, business experience, and core competencies. You need to then look at how much money you have.
After the research, you shall have found a suitable business to venture into. You then need to make your offer. This offer you make must have the price of the business, the training necessary before you start running it, the assets the business possesses, the financing details you shall get from the current owner, and the details of the non-compete agreement.
Once you have an agreement between you and the seller, you need to have all its details in writing. You also need to have a business attorney present as you make these agreements, to make all of it legal.
There is no denying the fact that it shall be a costly exercise to go out there and buy a business. That amount should remind you to exercise caution every step of the way. Finding the right business should remain your top priority.