Five Considerations On Becoming a Business Owner
Americans seek business ownership for a variety of reasons. Our clients report a lack of certainty in the workplace, the desire for greater flexibility, and personal satisfaction in doing something they love as some of the top reasons they seek business ownership. While income is important to most everyone, it is seldom the first or even the second reason they mention when describing why they want to invest in a business of their own.
Buying an existing business takes away some of the uncertainty that comes from starting up a new business. Unlike modern, start-up businesses, most existing companies are already generating a cash flow. However, if you want to find the right business to invest in, you will benefit from conducting thorough research before you invest your time and money.
- Consider how you can apply your skills and knowledge to lead the company to a new level of success. Don’t rule out something just because you don’t have expertise in the industry. One of the most successful auto repair shop owners we know has little expertise in repairs, but he knows how to lead his people to deliver quality customer service. Be careful but open-minded.
- Select a good, but not necessarily a perfect business. Look for a business you can realistically improve. Deliver better service, find new synergies, and target an untapped niche to turn your investment from good to excellent. You will generally pay a little less for a business that needs improvement, and you can increase your investment value.
- Choose businesses that can be separated success from the seller. Choose a business where transitioning the business ownership will not trigger a massive exodus of customers and clients. Seek businesses with customers loyal to the brand, not to the owner selling the business.
- Insist on practical training. Training time depends on the business and the investor. Specify exactly what your training will consist of in terms of time, content, tools, and who will do the training.
- Implement a clearly defined Non-Compete Clause as part of your sales contract. Specify the details in writing. In this Internet-driven age, make sure that the seller can not affect you by running the same business a state or even a country away. And make sure that all the key or corporate members are not going to compete with you after the sale.
When you search for your ideal business investment, conduct plenty of research. Find a reasonable attorney to help with reviewing your contract and legal matters. Have a trusted accountant give you perspective on the business finances. Use a good business intermediary to help you find a variety of businesses that appeal to you. A don’t forget to get the perspective of the friends and people your trust.
Brian Stephens is the Tampa Bay business broker office owner for Legacy Business Brokers. Legacy Business Brokers brings buyers and sellers of business together to create win-win solutions. See more at BuyBizFL.com.
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