We learn from our mistakes, that’s a fact. We’re taught that experience is the best teacher, but when we speak of business, one major mistake can cause you a fortune and it takes away valuable time to recover your losses instead of increasing your profits.
First things first, while you’re still on the planning stages, here are seven things that you must avoid when buying a business.
Searching without a business plan
Business planning is one of the keys to success. It provides directions on how to enhance your strengths and opportunities. Before searching for a business to buy, you must have a concrete plan on what you want your newly acquired business to be. Set feasible goals and dream BIG. Remember, a business plan is also a requirement when you’re searching for funding.
You’re not Alone
Getting the best deal when buying a business requires team effort. You’re lucky if you can buy a good business on your own. The best and safest way in buying a business is to consult a business broker with an outstanding track record that will guide you on the processes and requirements in buying a business.
Thinking it’s Easy
Technological advancement makes it convenient to buy and sell an enterprise, but it’s not as easy as you might think it is. Please remember that in buying a business you must have a smart plan. Analyse the all available data for your chosen business to make a sound decision. It also requires a lot of time in preparing needed documents and the given risk you have to take with your assets.
The Fad Virus
You will often see viral businesses that spread everywhere because of a fad. Many of you believe that these businesses are profitable, but the truth is, it only saturates the market and all of you will possibly share the same potential customers. Don’t get affected by the virus. Be creative and smart when buying a business. Be different.
Overspending on Franchise
Buying a franchise business will give you the advantage of having a well-established brand with a well-known products and services.Franchising may be tempting for a business buyer, but spending a lot just to buy a franchise is not a good idea. Overspending will make your Return on Investment longer and will also cut on your turnover and gross profits. Try to talk to other franchisees if they’re doing well in their respective areas. You must also figure out the solutions for common problems that they encounter and plan to apply it on your store.There are many available franchise business for sale. Business brokers can help you find the right one with a comparative marketing analysis (CMA).
Neglecting Financial Records
Financial Records are the mirrors that reflect the performance of the business. You must review all of them properly before deciding to buy. This is the point when you will decide to “take the burden” of a losing business or “be in heaven” with a potentially profitable venture. Overlooking financial records can be a disaster. Consider working with certified accountants and business analysts to help do the work for you.
Buying without comparative market analysis (CMA)
A comparative market analysis (CMA) is an examination of the prices at which similar businesses in the same area have recently sold. Business brokers conduct the CMA to help clients determine a competitive listing price for selling or buying a business. A CMA lets you know the true market value of the business you want to buy.
It’s very important to start right in order to save time and money. Knowing what to avoid can help you become more successful in purchasing and setting up your new business. Good luck!
If you are interested in available opportunities in the QLD area, check out Redmako’s latest listing of businesses for sale.