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How
To Buy The Right Business For You
By:
Richard Parker: Author of
How To Buy A Good Business At A Great
Price ©
 According
to industry statistics, over 90% of the
people who begin the search to buy a
business NEVER do! The only way
that you'll avoid being a 90-percenter
is by acquiring the right knowledge.
Likewise, the only way to ensure that
you will be successful in the business
is to be absolutely certain that you buy
the right one. Don’t be alarmed, most
people have no clue what business is
right for them. The number of businesses
for sale can be daunting; the choice is
enormous. There are many proven steps
that can help you determine what is the
right business for you.
Develop YOUR Golden Rules:
Put together your list of five golden
rules of what any business you buy MUST
have in place. Think about this and be
specific. Don't say: " I have to enjoy
what I do"...sure that's important, very
important in fact. However, if you're in
a business that you initially think
you're going to love, but you find
yourself losing money, I can assure you
that you'll learn to hate everyday very
quickly!
As an example, here are my five golden
rules for any business I consider
buying:
-
It must
be a sales and marketing-driven
business - that's what I do best.
- It
must have some element of
exclusivity either in the product or
within a territory. If not, I have
no point of difference to offer new
clients and maintaining current
clients will always be a risk.
- The
product or service must be a
high-margin item - this way, it's
simply a matter of time,
persistence, and sales savvy (my
strength) for me to build the
business. Plus, the margins will
allow me to try new, creative ways
of building the business.
-
There must be built-in demand for
the product or service. I've learned
the hard way that trying to create
demand is far too expensive.
- I do
not want to sell anything that
competes solely on price. There's no
long-term viability in that business
model.
These are
my rules. Unbreakable. Non-negotiable -
no matter what! Guess what? They are
bulletproof. When I find a business with
these in place, and there are plenty, I
am always going to be successful. You
can certainly follow mine, but I will
also show you how to modify them to find
the business that makes perfect sense
for you.
I must
admit that I do have a sixth and seventh
rule, but they are negotiable: I like
businesses that don’t have a lot of
employees and I prefer, if possible, to
have a business where there are repeat
orders from all clients. But again, I
will sway from these two but never, ever
from the other five.
Helpful
hint: you probably won’t come up with
five today. Your list may even change a
bit during your search. As you visit
different businesses, speak with
sellers, and conduct your research, you
may discover certain things that are
added or deleted from your list. That’s
OK. However, getting this list down pat
as soon as possible is fundamental to
your success!
"Whatever It Is That You Do Best"
Next, get a true grip on your
skills. Don’t pretend to be something
that you’re not. The rule here is that
whatever it is that you do best (sales,
marketing, operations, etc.), must be
the single most important driving factor
of the revenue and profits of any
business you consider purchasing. Repeat
the last sentence once again; it holds
the key to your success!
With
business ownership, one of the main
goals is for you to control your own
destiny. Don’t put yourself in a
position where if one employee leaves,
you’re in big trouble. Your skills must
be the fuel that drives the engine.
The right
business for you is one that will thrive
from your strengths and not suffer from
your weaknesses. Take a long, hard look
at yourself. Picture yourself in the
business. Of paramount importance is
that you must perceive yourself as
enjoying the business. If you can’t,
then there’s just no way that you can be
successful. The business that you choose
has to be one that you’ll be proud to
own.
Fall In Love With The Profit NOT The
Product!
Another key factor is to avoid falling
in love with the product; rather, you
must fall in love with the profit and
the lifestyle that it can deliver to
you. Many buyers begin to dream about
all of the exciting things about the
business and they become delusional
about what can realistically be
achieved. The product that the business
sells, or the service that it offers,
unless offensive in nature, is
meaningless in the overall scheme. If
the business does not produce the income
you need, or provide you with a
satisfactory return on your investment,
then rest assured, you will learn to
detest the product quickly.
Likewise,
a bland, boring product line can become
very attractive if the business is
growing and you’re enjoying the work.
Stay
Focused - Don't Get Discouraged
During the search phase, it’s easy to
become discouraged by the vast number of
available businesses. Don’t get
overwhelmed. Approach this methodically.
If necessary, rule out the ones that you
don’t want. For example, if you're not
interested in a gas station, restaurant
or convenience store, you'll rule out
50% of all online listings. Search
through listings paying attention to the
profits, not just the asking price.
Understand that listings do not always
portray the whole picture. Send
inquiries to the listed contact. Arrange
meetings with sellers. Prepare the
questions you need to ask. You cannot
buy a business from a listing. Visit
businesses. With each meeting you’ll get
closer to knowing what is and isn’t
right for you.
Above
all, get into the game. Once you own the
right business, you’ll never look back!
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