A person at a computer works through important steps before buying a business

Pre-acquisition Action Items: Steps You Must Take Before Buying a Business

Buying a business is a complex process. One of the smartest moves you can make is to spend time studying what it means to buy a business, weighing the pros and cons of acquisition, and understanding the process you’ll take to find, vet, negotiate, and finance the purchase.

Before buying a business, you should take the following steps to name your goals, understand your objectives, and ensure you’re ready for the challenges of acquiring a business:

Step 1

Identify your professional strengths, competencies, and interests. Then, consider how you might leverage them to help a similar or substantially different business succeed.

Step 2

Study how well the industries you’re drawn to are performing. Consider focusing on the ones that are growing rather than stagnant or declining.

Step 3

Think about whether the location of your new business is important. If it is, determine the radius you’d like to set for your search.

Step 4

Specify how profitable you’d want a business to be and how much risk you are willing to take on to achieve it.

Step 5

Determine how much you’re willing to invest or finance to acquire a high-quality business.

Step 6

Decide how involved you’d like to be in the business’s daily functions and how much time and energy you can afford to allocate to its operations.

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