How not to get caught short when preparing to buy a business
Deciding to buy a business is an exciting and potentially life changing moment, which is why it is so essential to thoroughly list, check and double check all of the practical, legal, financial and life implications.
The last thing you want is to discover your golden opportunity may be made of tin once it is too late to change your mind.
It’s time to think like a boy scout
That’s right – be prepared. Do your research. Check your equipment. Consider every contingency and plan for them all. Spend some quality time addressing these three especially crucial questions:
1. Do you have the funds
It sounds obvious but is a surprisingly common cause of disaster. Having the funds may mean more than just a deposit, loan or line of credit.
If you are moving from being an employee to being self-employed your cashflow might be in for a shock. Have you factored in not only ongoing business expenses but all of your existing life expenses?
If you are taking out a loan have you spoken at length with your financial institution so you can avoid any unnecessary extra costs and fees?
If the business is an investment have you calculated your expected ongoing payments and returns, the projected term of your investment and how to manage fluctuations in the market?
2. Do you have the mindset
The main difference in moving from a wage to running a business is that your source of motivation changes. Do you have sufficient drive, energy, patience and perseverance to be your own motivator? What about staff – are you prepared for being someone else’s boss?
Even if you are already a business owner, a new business will bring unforeseen challenges. How adaptable is your mindset? Do you have the necessary skills to run this business?
Remember the old adage – risk equals return. Playing it safe will work with some businesses but others will require leaps of faith. And every successful business needs an owner who is curious, open-minded, outward looking and ready to learn.
3. Do you have the support
Support from home is important, especially as your new business may demand long hours in the beginning. Support from a business partner can be a good idea – especially if you know your areas of weakness and strength and your partner compliments these.
However you will also need to have external, expert and objective professional support. Not only does this provide you with vital skills and knowledge, it can ease the pressure from your other areas of support.
Rinnovate is in the unique position of being able to offer you support through both the buying process and business advice and consultation. Having been with you through the stages of decison making and purchase, we will be in an unparallelled position to offer relevant, specific and timely advice as you establish and grow your business.