Buying yourself a business is a big deal, and you obviously want to give yourself the best chance at success.

How can you give yourself a leg up before someone hands you the keys? Here’s 6 ways:

1. Do your homework

This one might sound ridiculous – but most people would be shocked at how little research some business buyers do. You shouldn’t just be searching business listings. You should be looking at market trends, looking at what types of businesses are doing well and what types of businesses are struggling, what the local market actually looks like in the areas you’re considering, who your competition would be and how they’re doing things differently, what the areas for potential growth are, what the marketing opportunities could be – the list is long and should be exhaustive. You should have a decent grasp on the area, the market and the trends long before your first meeting with a seller. 

2. Stay within your skillset

When you make a major life change like buying a new business it can be tempting to jump into something completely new, but if you’re buying a business this is a huge mistake. Taking over as the owner of a business is hard enough because there’s a steep learning curve. You have to learn absolutely everything. Buying a business where you have zero practical experience takes that learning curve and makes it terrifyingly steep. Do yourself a favor and look at business opportunities that will utilize the skills you already have.

3. Make yourself a business plan

Starting any new venture without a plan is foolhardy at best. You need to go into your new business with an idea of where you think the business is headed, what you need your metrics to be in order to remain sustainable and where the line is when you walk away and lock the doors. A properly laid out business plan will help you hit the ground running, instead of guessing where you are and where you need to be. 

4. Don’t kill all of your capital

If you have $100,000 to spend on a new business, you should not be looking at $100,000 businesses. You need to reserve a decent chunk of your available capital for all the things you’re going to need to spend money on. Commercial rental deposits, licensing and permitting fees, initial payroll, new inventory orders, etc. Burning up all of your capital with the purchase alone will put you in a very precarious position right out of the gate. Reserve some of your cash to keep yourself from ending up in a bind.

5. Don’t focus on the wrong things

It can be exciting to walk into your new business on your first day as owner and “make it your own” – the temptation can be enormous to immediately start changing things to your liking. The problem here is you bought a functional, operating business. You have no idea on day one why that business is able to keep the doors open. Too many changes too fast (particularly changes meant only to satisfy your tastes) are almost always a waste of resources and time – and have the potential to drive away your regular clientele and staff. Focus on learning why things are the way they are, then make slow and incremental changes as needed. 

6. Don’t ignoring marketing

Many small businesses fail to use every marketing opportunity – some because of lack of time or resources, some because of burnout. Many new business owners walk in on day one and focus all of their energy on things other than marketing. Learning the business, getting to know the staff and regulars, making changes and the like. While these are important parts of your first days as owner, a big chunk of your energy should be focused on getting that business out to as many new customers as possible. Maybe the business needs a new website, maybe it needs a social media strategy, maybe it needs more community engagement. You need to be planning your new marketing strategy before you get handed the keys so you can begin to roll it out on day one. 

The message here is there are some very important things you can do both before you buy your new business as well as in your early days as owner that will help you set yourself up for success.

Are you looking at businesses to buy but aren’t sure what types of businesses would fit with your skillset? Would you like to know more about how to create a business plan or how to implement a new marketing strategy? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com