Are you thinking of buying a business? Whether you’re a first-time entrepreneur or an experienced business owner, there are a few things you need to consider before making your purchase. We’ve listed five of the most important considerations, so you don’t find yourself in a pickle.
1. Chosing the right location
It goes without saying, or does it? We have seen business owners time and time again get the location wrong, and as a result, their business suffers. Imagine having a brilliant website, fantastic products, but with no visitors. Just the same can be said for choosing a physical location for your business.
Having the right location is essential as it will determine who your customers are and can drastically affect business – for example, you may find a slight premium on businesses occupying a busy location, but it is so worth it in the long run, as lack of footfall will slowly kill your business.
2. The business itself
It’s important to do your research on the type of business you’re buying – is it something you have experience in and would be interested in running? Alternatively, is the potential for growth there?
It is beneficial for business owners to have industry knowledge so that they can spot ways to make the business more profitable. This includes being aware of the latest trends in the industry, being able to identify areas where costs can be cut, and knowing what services and products customers are looking for.
Don’t fall in love with the business without first being sure it has strong fundamentals and plenty of upside potential.
3. Finance
When buying a business with finance, it’s important to remember that you’re taking on a lot of responsibility. However, this also comes with a lot of benefits – you’ll have a stable income, you’ll be able to use the business’ assets as collateral and you’ll have the potential to increase your income.
It’s important to remember that there are also some risks involved in buying a business with finance. For example, if the business fails, you could lose your investment. It’s therefore important to do your research and make sure you’re aware of all the risks involved before making any decisions.
We recommend talking to a reputable finance broker, who can advise if raising finance is an option for you, your circumstances and the current finance markets.
4. Your time commitment to the business
When buying a business it is important to consider how much time you will be able to commit to it. If you’re not able to put in the hours, the business may not be successful. It’s also important to factor in your personal life – will the business take up too much of your time and affect your relationships or hobbies?
It’s therefore important to carefully consider how much time you are able and willing to commit to the business.
We often see business owners who work 70+ hours per week in their business, whilst taking out very little. If they spent the time to actually work out what the business is paying them on an hourly basis, I think they would be shocked. Lots of micro business owners like this would find themselves more well-off with additional benefits working for a local supermarket on minimum wage.
5. Government support for entrepreneurs in the UK
There are many government initiatives that can help small businesses, these include funding allowances and grants, access to mentors and low-interest loans. It’s important to investigate what programmes are available in your area before you buy a business.
So there you have it, 5 things that you need to consider before making that call to the agent to say “sign me up”. Just remember, before you commit to buying a business you wield the power to search for a kick-ass business that ticks all the boxes for your lifestyle.
