Ten Questions to Ask Yourself Before You Buy a Business

Photo: Leeloo The First

Behind every big decision in life are unasked questions. If we have wise people around us, they will often make us aware of those questions, the answer to which can prepare us for success in our endeavors.

Before you buy a business, you should ask yourself some of these questions, which will help you better shape what your entrepreneurial journey will look like (and how it might end). Next to each question, we’ll offer some additional reflection points.

1. What are your reasons for wanting your own business? There’s no right answer here, but it can’t be vague.

2. What emotions does the idea of business ownership stir up in you? How do those emotions play into your decision to buy? Don’t let your desire to chase your dream lead you into buying a business too quickly or buying the wrong business for your skill set.

3. Who else will your choices impact? Get your family and friends involved sooner, rather than later, in your business buying process. Their support and buy-in are crucial.

4. Who questions your choices and keeps you in check? How open are you to be challenged by others? While business ownership is often touted as being “in charge”, it also means being willing to learn, listen, and serve. If you don’t possess the ability to take criticism, you need to get that ability really quickly if you hope to be a successful business owner.

5. Do you do enough due diligence when making important decisions? Don’t underestimate the power and accuracy of your gut, but never, ever neglect due diligence, especially when buying a business.

6. How do you respond when things don’t go according to plan? Can you set aside enough money to protect the business (and yourself) in case things don’t go as you hope they will? In your financial projections, build in a “didn’t see that coming” margin.

7. What accomplishments are you chasing? What is this all for? We know why you may buy a business to start, but what do you think (or hope) your motivation may morph into over time?

8. How effective are you at organizing and managing systems? When you buy a business, many systems will be in place for you, but as you grow it, you will need to create and manage new ones of your own. Is this a skill set you have? If not, are you willing to hire for it?

9. How are you with managing people, be they employees, customers, or vendors? Not every business deals with people in the same manner, but like it or not, every business deals with people in some way or another.

10. What’s your exit plan? If you begin with the end in mind, you will have a flight plan that takes you from buying a business to selling it years later. The best-prepared buyers have at least a general outline of what that flight plan looks like.

Want a grade on some of your answers to these questions? We’d love to hear from you.