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 ahead:
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Step 1Identify your professional strengths, competencies, and interests. Then, think about how you could leverage them to help a similar or substantially different business succeed. |
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Step 2Study how well the industries you’re drawn to are performing. Consider focusing on the ones that are growing rather than stagnant or declining. |
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Step 3Think about whether the location of your new business is important. If it is, determine the radius you’d like to set for your search. |
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Step 4Specify how profitable you’d want a business to be and how much risk you are willing to take on to achieve it. |
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Step 5Determine how much you’re willing to invest or finance to acquire a high-quality business. |
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Step 6Decide 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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