Purchasing a business is a big step. Liking a product or service, and owning a business that sells the product or service, are two very different things. It is crucial to purchase the business that is right for you AND that has the potential to be profitable for the foreseeable future.
The experts at ARBB have experience with many different types of businesses. The team is here to guide Buyers to the business that will be best for their goals, lifestyle and financial needs. Before making the purchase, there are some questions to consider. Let’s get started!
Do you see yourself in this business long-term?
You may love coffee or jewellery or yoga but can you see yourself running a business in that industry every day? Take some time to consider if you enjoy the experience of the product or service or if you want to dedicate your time, energy and resources to working in that industry full-time. If you have never worked in that particular industry, interview entrepreneurs in that field to uncover the pros and cons and some behind-the-scenes insight to ensure the business and the lifestyle is for you.
Is there a solid financial foundation?
Review the financial documents in detail with a qualified Business Broker to understand if the business has shown growth and, more importantly, if there is potential for continued growth. Understanding your financial potential will determine if the business is worth the investment.
Can you add value?
Do you add value with your current skills level, experience and knowledge, or are you stepping into something that is completely outside your scope? Working in a familiar field will allow you to be confident in your abilities to add value.
Is there a positive cash flow?
A common complaint in small business is the lack of cash flow. Ask yourself if the sales volume translate into positive cash flow? Also, are there any system or equipment upgrades required that will take a toll on your cash flow? There are important questions to consider before you move forward. Cash is king!
When choosing the business that is right for you, you may not find a perfect fit. There is, after all, no perfect business, however, if you do your homework and have a passion for a particular business, it is often worth the risk. Owning and operating business will take time, energy and resources. Cover all of your bases and ensure you are stepping into a business that is worth the investment. Once you find what you love, there will be no stopping you!
AR Business Brokers is a team of professional Business Brokers who are ready to help you buy a business. We are located in Mississauga and we specialize in helping business owners buy and sell privately owned businesses in the GTA and Ontario. Satisfied clients are our greatest achievement – we are always here to help. Check our current businesses for sale here.