How to Know which Small Business Is Right for You
Here’s one of the first things that we’ve learned about buying a small business: not every good opportunity will be the right opportunity for every person, specifically, YOU.
Sure, the business may already be thriving in its current infrastructure. It may already have an established customer base too. And for some reason, the owners may be selling at a reasonable cost.
But the question remains—is it really the right business for you?
Below are 3 important questions to determine if the business aligns with your future goals.
- Do you have the right skills to run the business effectively?
First, you need to know the qualities and skills that are necessary for keeping the business running. Is this something that you already have? Can you learn it? Or is it something completely different from your current set of skills, interests, and experience?
If you want it to thrive in your role as its owner (and for the business to flourish as well), you need to be able to understand and be passionate about what you’ll be selling, the customers, the industry, the types of employees, and the current business model.
Not sure how to answer this question? Start here: take stock of your interests, passions, skills, and experience. Then, make sure that the business that you buy is in line with what you have on this list. The more familiar you are with the business, the better your chances of keeping it afloat and introducing innovative ideas to improve it.
- Is this the type of business that you were looking to buy in the first place?
Naturally, you may already have a preconceived idea of what and how your business will be. Whether a result of careful planning or idle daydreaming, this concept—no matter how well-formed or abstract it may be—is still a pretty good indicator for the type of business that you should be buying.
So, here’s a little exercise: look back and recall just what it was you were imagining when you were still dreaming about becoming an entrepreneur.
Don’t forget to factor in the industry, the lifestyle that you need to have as the owner, and the location of your business.
- Does it align with your goals and resources?
Buying a business is a big decision—one that will affect your life and livelihood. So, of course, you want it to align with your goals and resources.
For example, upon closer inspection, the changes that you want to apply to a particular business may end up costing way beyond your budget. If so, this may not be the best option for you.
And it’s not just about the money either. Your resources could also mean the time that you’re willing to invest in growing the business. So does the business require you to be available at all hours, or is it the traditional nine-to-five?
Let’s not forget about your goals either. If you want to own multiple businesses eventually, is this the type of business that will allow you to delegate? Or does it require your undivided attention to operate seamlessly?
Our Final Thoughts
Buying a business means more than just getting a good deal out of the sale—it should also be about securing the life and livelihood you want.
So, before you make an offer, be sure to examine the business and if it really aligns with your goals as an entrepreneur.