“The true entrepreneur is a doer, not a dreamer.” -Nolan Bushnell
If you’re one of millions of people who lie awake at night trying to solve a problem and can’t wait until the morning to race to the office or workshop to get a head start on the solution? You just might be an entrepreneur. An entrepreneur asks the question, “how can we?” rather than “what if someone?” The problem is, starting a business is difficult, expensive, and can take years to see the fruit of your labor.
Not Every Entrepreneur Starts A Business
Being an entrepreneur doesn’t mean you are destined to start something, however it may mean you are designed to run something. A corporation, a foundation, an association—something. You lead with a vision to create something greater than what exists today, or meet a need that is often overlooked. Building from the ground up is not the only answer.
Entrepreneurship Also Means You Can Buy A Business
A healthy business, a business in distress, a business in a burgeoning market—the most important detail is understanding what you’re getting yourself into and ensuring the business you’re buying is properly valued. Just because you’re looking to buy a business from the founder doesn’t mean the business is broken or a failure, and your offer shouldn’t be based on this assumption. Be prepared to do some leg work researching the market, going through the business’ financials, and let your offer reflect the current value and near-term opportunities rather than a low offer based on assumption.
When You’re Ready To Buy A Business, Do The Research
Buying a business is a big, and often long-term decision. From market/industry, to company size, to location and anticipated lifestyle. Is this a company that will require a great deal of travel or holding odd hours to operate? Are you looking to operate the business yourself or hire a manager for the day-to-day?
If you’re purchasing a healthy business, it’s likely the business seller has worked diligently to build the company over the past 6 months to a year (or more) to reflect a healthy balance sheet and command a premium. As you conduct your due diligence as a business buyer, consider what you bring to the table with the company—what is your growth strategy? Are there un-tapped markets the business is capable of reaching or a larger marketshare up for grabs?
Plan the Transition of Business Ownership
Drafting the sales agreement with a business should include a transition plan—more than simply some bank accounts and building keys. At a minimum, existing customers and vendors will need to be notified, and in many cases, employee introductions and roles defined for the new owner. In certain instances, it may be beneficial to contract the seller as a consultant for a period of time post-sale to ease the transition and set up a successful path.
Get Help from a Business Broker
As a buyer, hiring a business broker can help ensure the necessary due diligence is taken during the research and deal structuring takes place. A trusted business broker can also advise on the proper time to walk from a deal should the arrangement be disadvantageous—no matter how appealing the company is. As you explore different opportunities to buy a business, schedule a consultation with a Sun Acquisitions advisor to clarify your objectives and learn how our services can help set you up for a successful business acquisition.