Okay, now that you have made up your mind that you want your freedom from corporate bureaucrats,
and you are ready to manage your own destiny, where do you start? Finding the right company is a
very challenging task. But before we get into the negotiating and the "how to" part of buying a
business, let's review what you are all about, and then we'll cover strategy.
Based on my experience, what follows are some observations about buyers that have gone on to become
successful business owners. The list is not meant to be all-inclusive or in stone, but anyone thinking
about putting their hard earned money on the line should review these and see how they stack up, or how
they can remedy a potential weakness.
- You must have the ability to sell, and have some marketing skills.
- Successful buyers always have a game plan; most of their time is spent looking at the future of the business.
- Buyers who are short on selling/marketing skills have a partner who can handle that end of the business.
- Give attention to the cash flow after your debt payments to make sure that you have some breathing room.
- Make sure you're comfortable with the seller, and that he/she is, in a nutshell, honest.
- Every business will have a flaw; the key is finding it, and how you will manage it. There is no such thing as a perfect business at a perfect price at perfect terms.
- Once you find a business, don't fall into what I call "paralysis by analysis".
- You have seen this one before many times; have some good outside advisors, and use them.
- During your evaluation, ask yourself exactly what you are buying. It may be a dependable cash flow, a good customer base, a business that offers growth, reliable equipment, a new and exciting technology, instant fame, to name a few. Know what you are buying!
