The idea of becoming your own boss is always appealing as millions of people have tried and liked it. How you determine if you are ready to become one yourself? What are the challenges of buying an existing business that’s for sale?

 

There are ten questions that you need to be able to ask yourself:  

1. Do I thrive on risk and challenge?
   
1. Do you want the freedom and responsibility?
   
1. Not having anyone over you means that you will be the person who receives all the acclaim for the business’ success and scrutiny for its failures.
   
2. What are my reasons for buying a business?
   
1. There has to be a clear motivation that you must think out carefully. Is your reason solely financial – most businesses take years before they start receiving major profits from sales; job security; dissatisfied with current job; want recognition for efforts, make more money? Will being an entrepreneur fulfill all these needs?
   
3. What is my support group?
   
1. Will you have a team backing you up, or are you on your own?
   
1. Family, spouse, friends;
   
2. Financial advisers, attorneys;
3. Business partners with experience in ownership.
1. This one will be the best suited for you out of the three possibilities.
   
4. How much do I have to invest?
   
1. Are you willing to spend what you have in liquid capital?
   
2. What are the risks financially?
   
3. Loan possibilities?
   
5. What would I like to do with the rest of my life?
   
1. Do you want to not only be your own boss but run this kind of business forever?
   
2. Is this the industry that I want to be in?
1. What tools do I need to be successful?
2. What makes you familiar with this industry to be successful?
   
6. What is the trend of that business/industry?
   
1. Find out the gross sales of that business?
   
2. What cash flow do you have to work with?
   
7. What are the necessary expenses?
   
1. Leases, rents, labor, inventory and other expenses required to run the business effectively.
   
8. Why is the present owner selling the business?
   
1. Poor health, retirement, partnership dispute, burn out, relocation plans, not making enough money, poor management, undercapitalization, better opportunities elsewhere.
   
2. Seller is a pro that buys, builds and sells businesses.
   
9. How do I feel about this particular business?
   
1. Do you like the industry, customers, feel of the business?
   
2. Comfortable with being there every day to oversee and run?
   
10. How do I compare to the present owner?
    
1. Is he/she similar to you in terms of personality?
1. High strung or easygoing?
2. Similar and polar opposite business habits
   
3. Few ever do things the same way as the present owner
   
4. Most see additional business opportunity
   
1. Costs $$$                                                                                      
   

Once you answer these questions. You will have a clear understanding if business ownership is right for you. Contact your local VR business intermediary for more information.