Nine out of 10 people who start the search for a business to buy never complete the process, according to research.
Finding the right type of small business for sale is often a journey in itself, and a very crucial one at that. It is estimated that around one in four people who wish to be their own boss don't actually know which type of business they want to run.
A significant number of people change their minds halfway through the business buying process when they discover a business type to be unsuitable. Many business brokers and agents, whose role in the process is equivalent to that of estate agents, report that people often end up buying a different business from the one that originally led them to their door.
It means that researching the businesses-for-sale market is a fundamental first step. Often, buyers learn that they are most suited to a business type they had never considered before.
The following steps are designed to help you narrow down the type of business you want to buy.
Your existing talents, skills and employment history will be among the biggest influences on the type of business you end up choosing
Becoming your own boss will demand time, energy, commitment and money. This will be one of the biggest steps you take in your life and you have to understand the consequences and risks.
Don't fool yourself. Be realistic. How hungry are you? How badly do you want this? Are you ready for the challenge?
2. Understand yourself
Your existing talents, skills and employment history will be among the biggest influences on the type of business you end up choosing. Using these existing skills will help you greatly.
What are you good at? What experience do you have? In what do you excel? Make a list of all your talents.
Think back over your employment history and list the occasions you got something right. When looking at different business opportunities make sure that some (if not all) of these talents can be transferred.
3. Rediscover your passions
Regardless of how attractive a business opportunity appears to be, if you have any reservations about whether you will enjoy the work do not contemplate proceeding any further. Your passion about what you do will see you through the tough times.
Find out what you love. Is it the outdoors, the countryside? Is it working from home with your family? Do you love closing sales? Do you love dealing with people? Are you creative? Do you enjoy communicating?
4. Be prepared to learn
Although you might bring transferable skills acquired in your previous background to the new business, you must be prepared to learn new ones. Many people who start or buy a business for the first time have never before had to delegate tasks.
When you become your own boss you will have to learn how to get the best out of your employees. They will look to you for guidance - whether you are running a cafe or manufacturing company.
The moment you become the boss, all eyes will be on you. You will be expected to lead, work and communicate with, and motivate your staff.
Remember: you will be the driving force of your company. It must be your employees who rely on you and not the other way around.
5. Be financially realistic
Your financial status will affect the type of business you are able to buy. There is often a difference between the business you would like and the one you can afford - as with a house or car.
It is therefore important not to stretch yourself financially. No matter how attractive a business may appear to be, always exercise caution and try to look at all the possible negatives.
Ask yourself: is this business as good as it appears to be? Taking into account unforeseen expenses, how much will this business really cost? Are there any hidden costs? Without including family loans, how much money do you have access to? How will the rest of the money be raised and under what terms?
6. Consult your family
If you have a family then starting or buying a business is a decision that cannot be taken in isolation. Being your own boss will have far-reaching consequences for your family life - from the risks to your financial security to the inevitably long working hours.
It is therefore important that the decision to start or buy a business is made with your family. Their support will be a great help and family disputes must be avoided so you can be free to concentrate on making the business a success.
7. Golden rules
Develop criteria that you'll follow to the letter throughout the selection process. If the shoe doesn't fit, don't even think about trying it on.
Come up with five things that your potential new business must have in place before you buy it. For example, an existing demand for the product or service could be a prerequisite - trying to generate demand often proves expensive and a lot of hard work.
Always be aware of these rules. Never break them. It may take time to develop them during the research process, but they have to be tailored specifically to your passions, your skills and your attributes.
If you enjoyed this article, sign up for a *free* BusinessesForSale.com account to receive the latest small business advice, features, videos and listings directly to your inbox!