What should I look for in a business?
You want to consider businesses that you feel comfortable owning and operating, ie; buy a business in an industry you are comfortable with. Having great pride in your business is an important ingredient for success. Consider those businesses that you can afford with the cash you have available.
One main reason businesses fail is lack of capital and you don’t want to put yourself in that situation. The business you buy must be able to provide you with enough income to accommodate your lifestyle. In the business brokerage world we refer to a “sanity check”. You must have enough cash flow to pay yourself after making payments on the debt service and paying the operating expenses.
Most buyers make a business purchase with great ideas and ways to improve the business operation. You should pay for a business based on its past performance but you want to find something with potential and an opportunity you can improve. You have skills, new energy and talent that can bring value to a business.
These opportunities are available. On the other hand, don’t be too quick for change. “If it ain’t broke, don’t fix it.” Keep this in mind if you think to buy a business in the near future, know your reasons for doing so.