There are so many questions you might ask yourself when thinking about becoming a business owner.
But today we wanted to focus on three important ones that have to be answered.
Where will I get the money?
We’ve discussed various ways to get the money for buying a business in the past.
Exploring and understanding this step well (including a solid relationship with a banker) will give you the range of purchasing power you have. In addition, you’ll have a snapshot of the variety of businesses you could consider in that price range.
Do I buy a franchise or an existing business?
This has just as much to do with personality as anything else. Are you the sort of person who wants to follow a proven system or do you want to experiment, make mistakes (and find successes) through your own initiatives and trial and error?
Franchising offers the appeal of trial-tested methods, whereas your own business offers you flexibility and nimbleness that can’t exist at the level of a national brand.
Are the books in order?
On the broker side of the business, there’s nothing more unfortunate (or less surprising) than finding that a business doesn’t have its books in order. “Good enough” has been the standard for so many years, with no forethought of a future in which a buyer might want more than a box of receipts and incoherent financials.
A business with a solid and reliable set of books, not just for the current year, but for many years back in its history, tells you a lot about how the business is run and the priorities of the ownership and staff.
The books will show you where the opportunities and the weaknesses are. These are the medical records of that business. We try to avoid listing or representing a business that can’t supply historical financials or has troublesome tax issues. Make no mistake… you should be extra cautious when considering buying a business with those issues too.
Do you have follow up questions for any of the questions that we listed above, or any questions on any part of the buying process? Give us a call at 913-383-2671. We’d love to help!