4 tips to choose the right business for you
When you go to buy a business, one of the key driving factors is financials. You want to make sure the business you’re buying or starting will be lucrative, that it will be able to generate a profit.
But buying a business is a LOT more than just numbers.
Of course, be sure to do the proper due diligence (especially into the financials), but also take something else into account —
A big part —( if not the biggest) — of whether or not your small business will succeed will be determined by you. What are your skills and experience? What are you passionate about?
Self reflection on these questions is important to help you make the right decision.
If you choose a business that is best aligned with your personality, talents, and lifestyle, you’re more apt to succeed. Check out our 4 tips to choosing the best business to buy that’s a good fit for you and your skills.
1. Leverage your strengths and passions
If you choose a business to buy that involves something you have a talent for and/or you are passionate about, your strengths become an asset of the company. Think about what you excel at and what you enjoy doing. Get creative about ways that you can create revenue from what you want to do, i.e. buy or start a business.
If you are passionate about coffee and pastries, you may want to look into owning a cafe. Think also about your experience in various fields — even your personal experiences — that you can leverage to be a good business owner. This can help you determine an environment where you can thrive (and hopefully, your employees with you).
On a final note, don’t neglect practical realities. If you purchase a business, you won’t have to start from the ground-up. Buying a business as a new business owner can often be more advantageous in terms of financing, time, etc.
2. Be real with yourself.
Take an honest look at areas where you lack expertise or need improvement. Know your limits and know when you will have to delegate/outsource. Starting a new business, whether you buy one or begin from the ground-up, and running it successfully is one of the most rewarding experiences there is.
But it can also be highly demanding, so make sure you’re willing to take on a high level of responsibility and accountability.
Maybe you’re passionate about fashion but have no experience in the retail industry; perhaps going the managerial/ownership role is wrong for you. If you prefer not to work on the weekends or early in the morning, buying a cafe probably won’t suit your lifestyle.
It’s important that as a business owner, you can fulfill your lifestyle expectations while still putting in the large amount of work it takes to operate a business.
Your personal and professional qualities are also a big part of what will make things go roughly or smoothly. Be real with yourself about your strengths and weaknesses, skills, and experience. Find out where the gaps are and how you can fill them. Often, fine-tuning your skills or investing in learning new ones will pay big dividends as a small business owner.
3. Consider the options and find the right fit.
Depending on your skill set, experience, and personality, it’s possible that many businesses match what you have to offer and what you’re looking for.
Be sure to really consider all the options on an analytical level; you can do this according to income, time spent working, etc. It’s a good idea to layout a simple list of pros and cons with each option, too. You’ll be able to visually see what you’ll be dealing with that’s not ideal for your lifestyle, how much you can handle, etc.
Also, think about what is important to you and how you value your time. Some people are happy to put in 40+ hour work weeks and beyond for the right price; others prefer to work less. Some prefer to work in teams versus solo, etc.
Finally, finding the right fit for you means aligning your professional and personal strengths with a business that will be profitable and fit your lifestyle. Remember, you can’t be good at everything; don’t let a lack of knowledge or experience intimidate you.
For example, you could purchase a franchise business known for their full support in marketing, accounting, branding, etc.
Your skills, your budget, and your strengths will ultimately determine the right fit. When all those come together in a compatible way, you’ll know you’ve found the right business for you.
4. Research! Research! Research!
Once you know the industry that fits you or the business you’re confident will align well with what you have to offer, it’s critical to research as much as you can. You need to use tools like the ATO Small Business Benchmarks to see how your particular sector is doing. This can help you learn about larger market trends, how they may or may not affect your business, or if they’re total deal breakers.
Make sure to:
- Clearly identify and research your potential customers, or current customers if purchasing a business.
- Learn the ins and outs of your competitors; the more information the better.
- Learn more about the industry itself, consumer trends, products, etc.
Are you buying a business in Perth? Do you have a Perth business for sale? For more information on how you can get the best results, contact Angela at Advance Business Brokers today.