While many of us dream of opening our own business and making it very successful, the truth is much less glamorous. The percentage of new start up businesses that succeed and remain operational after the first year is very small. There is always the option of acquiring a business that is already established and has a proven track record. For most entrepreneurs this has long been the biggest debate and each has its own merits.
If you are thinking about acquiring a business that has already been established, there are several things that you need to take into consideration before you sign a contract to buy the business. Since you are going to be buying an established business, you should hire a professional to examine their books so that you have a good idea of just how much money this business has been making in the past few months or even years. This way if there has been a major drop in the level of income, you can find out why.
Any time you consider acquiring a business instead of starting one from scratch you are going to be getting everything that goes with it. This includes the employees that are already working there. In theory this means that you should be inheriting a fully trained and functional staff. You should however ask to read each employee’s personnel folder and any performance evaluations so that you can weed out anyone who is not likely to provide you with the level of skill or performance that you will need.
You should not think about acquiring any type of business that you are not really interested in the end product as you are more likely to be relying solely on those who work for you to provide you with the small details that make a business successful. When you own a business that you are actually interested in, you will find that you are more likely to spend time researching ways to make it better and as such more profitable, which is the reason you wanted to go into business for yourself in the first place.
One last thought when you are looking at acquiring a business, ask lots of questions. No matter how much you might think you know about a particular type of business, each one is different and as such requires a specific set of skills to make it successful. Talk to professionals in like businesses to see if the one you are looking at has a chance of success and to get advice on ways to make it better.
There is no substitute for professional advice, even when you think you have all of the answers, you probably do not. For more help and information you can turn to the Insighters Guide to Business Acquisitions for the information you are missing. Through this blog you will learn how to avoid the common and not so common pitfalls of buying a business in the hopes that you will learn enough to make your transition to a business owner a smooth one.