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It is crucial that you prepare yourself properly and
educate yourself for this journey and take the necessary steps to be
certain that you make all of the right decisions along the way.
Starting Off Right
It is estimated that 70% of all searches by business
buyers are now conducted via the Internet. You must first identify what
type of business is right for you and then focus your search
accordingly. Take a good look at yourself. What are your strengths,
weaknesses, likes and dislikes? Don't try to be something you're not.
Most people simply don't know what's right for them
and that's fine. If this is your predicament, sometimes it's best to
start by ruling out all of the businesses you don't want. Next, consider
your finances and focus solely upon those that make sense from an
investment perspective. With these two criterias alone, you'll be able
to whittle down the choices.
Educate Yourself About This Process
Unless you have a wealth of experience buying
businesses, it is critical that you acquire the necessary knowledge and
information to make this decision. You are going to face an onslaught of
decisions throughout this process. Having the knowledge will likely
make the entire difference between buying the right business and the
wrong one.
It is extremely important to find quality
professionals that specialize in business transactions of the size and
type you are considering. It is incumbent upon you to take the time to
learn what is involved and how to successfully navigate your way to your
dream. Think of it this way: if you're going to invest your savings to
buy a business; shouldn't you first invest the time to learn how to buy
the right one? It's been proven over and over again that well informed,
properly prepared buyers acquire good businesses. This is one decision
you must get right the first time!
Determine Your Investment Level
Determine with absolute certainty how much of your
own cash you are prepared to invest. Don't bother looking at businesses
that are unaffordable. Over 80% of small business purchases involve
seller financing. Generally, this is 30% to 50% of the purchase price.
If you have US$ 100,000 to invest, don't look at businesses that will
sell for US$ 200,000.
Also, take the time to sit down with bank loan
officers to research all avenues for your financing. They provide all
types of loans for entrepreneurs financing a business purchase.
Business Supervisor - Do You Need One?
I am a firm believer in using a business supervisor
to help you throughout the process. A good business supervisor can, and
will:
- Provide you with access to a vast database of businesses for sale
- Walk you through the valuation process
- Provide you with comparable business valuations
- Keep the deal moving along when obstacles are encountered
- Be the bearer of bad news to the seller when necessary
- Ensure all pertinent documents are assembled for the closing
Commit to a deadline for buying a business (not just "looking" for one).
- Set aside time every day to work on this project.
- Organize your finances.
- Work on determining what type of business will thrive from your strengths and not suffer from your weaknesses.
- Seek professional advice from a qualified business supervisor.
- Unless you have a wealth of experience buying businesses, then educate yourself about this process. Learn as much as you can. When it comes to investing in your future, you can never know too much!
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