The New Year brings many resolutions; one of the top every year however is change of career. To some that may mean changing a job, but to others it may mean entering a new business or becoming an entrepreneur for the first time. As we represent many current and new business owners in Colorado, we have compiled the top five things every individual should know before they buy a business.
- Determine what you are looking for: Searching for a business that ‘cash flows’ and is ‘growing’ is a pretty difficult process. Short of interviewing thousands of business owners there is no way to determine which businesses fit these criteria. Start with a more concrete qualifier instead. Do you want a business with high profitability? Low overhead? Established staff? Brick and mortar location?
- Narrow your search: Now that you have your determinants, research specific industries that you are interested in and compare them to your qualification requirements. If you want low overhead and a home based business, a restaurant probably isn’t for you.
- Do some research: Read up on your target industries; know what typical industry statistics are when it comes to profitability, overhead, and staffing.
- Hire a broker: Yes, we are partial on this one but it’s true. Just like you are an expert in your field, business intermediaries are experts in buying and selling businesses. A broker can provide you invaluable knowledge on current sales trends, businesses that are available for sale, and even find you businesses that are not yet on the market.
- Stick to your gut: You can spend years (yes, years) researching different opportunities. Stop wasting time looking at businesses that don’t fit your qualifications, if something doesn’t feel right from the start – trust your instinct. Say no, and move on.
Buying a business is a complicated manner. If you have additional questions, please contact one of our Colorado business brokers at 720.259.5099 or email us. You can also read more about our buyer services at this link.