November 7, 2011
Business Buying Bliss?
Buying a business almost always requires a leap of faith – and a dose of fearlessness. With that in mind, here are a few steps to help minimize the risk:
Before signing on the dotted line, “Be brutally honest with [yourself] regarding your economic situation, the time and energy you can invest in the business and what emotional rewards you expect to reap,” says Polly White of Whitestone Partners, a management consulting firm.
When it comes to business ownership, those who have done it successfully know passion doesn’t always translate to profit.
“If you want to bake cakes, don’t open a bakery. Get a job as a baker,” says White. She adds that although you must be skilled at the primary work of the business, it will be far from your only day-to-day duties.
White says steer clear of retail outlets close in proximity to a similar business. Also, “if there isn’t a clear reason for the owner to sell,” she explains, “perhaps they know something you don’t.” Refusal from the owner to sign a reasonable non-compete is also a bad sign, as “this may indicate that he or she plans on competing against you after the sale.”
Not sure which business is right for you? Organizations like NOLO give easy-to-follow overviews of what to know before closing the deal, like getting the business appraised and agreeing on an installment plan for payment.
Bonus PINK Link: Find out what to consider before purchasing a franchise in our online exclusive.
By Farren Davis
"The only requirement of having a dream is believing in it." Molly Barker
Supporting images from FreeDigitalPhotos.net, Arvind Balaraman, jannoon028, and renjith krishnan.