The Right Business for You
Finding the right business means more than finding a good deal. When buying a business, there are a lot of factors to consider. You will be asked to evaluate the company’s financial records, its future projections, etc. While all of this is an important part of the due diligence process, don’t forget to make sure it is the right business for you.
For your future business to be successful, it must be a good fit. In this post, we will discuss some things to consider about yourself when buying a small business, including:
- Your interests
- Your skillset
- Business location
- Business size
Be Realistic About Your Interests When Buying A Business
It is important to choose a business that you can be excited and passionate about as a business owner. Just because you like going out to eat doesn’t mean you should be a restaurateur. You will be spending a lot of time on your new business, so it is important that you consider what kind of industry interests you. Don’t choose a business in an area you find uninteresting or it will be hard for you to be an engaged member of that field.
A terrific way to gain more insight into an industry is to talk to other small business owners about their experiences. This can give you an insider’s perspective and help better shape your understanding of whether you are going to be able to find the right business for you within a given field.
Consider Your Skillset
While being passionate about an industry can contribute to success, it won’t ensure a thriving business. As we mentioned, enjoying restaurants doesn’t necessarily mean you should own one. Industry knowledge and experience is a vital element to successfully running a business.
Consider what skills you already have that you can bring to the table to help a small business thrive. Even if your experiences were formed in a different industry than the one you are currently considering, think about ways in which your knowledge may transfer.
If at the end of the day you still want to buy a restaurant, but have no knowledge of the restaurant industry, consider finding ways to develop those skills. Perhaps work in the industry for a while before buying into it; or consider surrounding yourself with advisors or business partners who can help fill in the gaps.
Buying a business should be an exciting journey. Part of that excitement comes from discovering what you’re passionate about and where you think you can succeed.
Your Lifestyle Matters
Different businesses place different demands on their owners. You will be the final word on issues pertaining to your business. Thinking through how this responsibility will shape your lifestyle is another necessary part of selecting the right business for you. In evaluating how a business can affect your lifestyle and how you want to spend your time, come up with some answers to the following:
- What kind of hours are you interested in working? A typical 9-to-5 or off-hours? Are you open to traveling for work? If so, how often and how far?
- How many employees are you comfortable having? What about when the business grows?
- What kind of relationship do you want to have with the people you manage?
- How far are you willing to commute? Can you run your business remotely?
Going back to our restaurant example: weekend nights and holiday seasons are among the busiest times for restaurants. Can you see yourself at the restaurant during those times?
Location, Location, Location
Building off of our last point regarding lifestyle, the physical location of a business can play a major role in whether or not it is a good fit. Everyone knows that the location of a business can deeply impact its success – whether it be a sandwich shop in the heart of a business district or a hair salon without any competition for miles – location is paramount to success.
That said, location applies to a buyer’s decision making as well. What if your dream business is for sale in Charleston, but you live in Miami? Are you willing to relocate? And if so, how far and under what circumstances? Considering what changes in your life you are willing to make, and applying that knowledge to the search process, can help you create a list of priorities to consider when looking for the right business for you.
It is also important to consider how different locations will affect costs. Taxes, labor costs, and other expenses will differ depending on where your business is located. Or maybe you want a business without a physical location – these are all questions to be asking as you begin your search.
Be Goldilocks when Finding the Right Business for Yourself
Many of the variables we’ve discussed relate to one another. For example, the industry you choose, or how many employees you want, may dictate the size of a business. Size also takes into account whether a business is small and family-owned or if it is a big, more corporate enterprise.
Larger businesses can present different challenges and opportunities. Generally speaking, bigger businesses require more high-level strategic management. Consider the difference between owning a single retail store and owning ten of the same store spread across a metro area. If you crave interacting with customers, you might not get that in the multi-store example.
In thinking about your ideal business size, also take into consideration where you see yourself and your business down the road. Do you want to buy big and stay big or buy small with the potential to grow into a medium or even large-sized organization? Your end goals may help dictate the ideally-sized business to purchase.
Setting Off on Your Journey
Buying a business should be an exciting journey. Part of that excitement comes from discovering what you’re passionate about and where you think you can succeed. Once you’ve thought about the questions posed today, you might be ready to conduct a business search and take the next step toward finding the right business for you.
DISCLAIMER: The information contained in this article is for informational and discussion purposes only, and should not be relied upon without seeking your own professional advice. The Firm Exchange, LLC is not a law firm, accounting firm or professional services firm, and accordingly it disclaims any liability for any reliance on the contents of this article. As each situation is unique, you are encouraged to discuss your specific situation with a qualified attorney, accountant and/or other relevant professional services provider.