For many people in Minnesota, owning their own small business is a dream come true. These individuals may develop a business from the ground up, or they may choose to buy a business that is already established in a particular market sector.
Either option is a good choice depending on the specific buyer interest, desires and their commitment to the business. Starting a business from scratch is the most demanding, requiring extensive management, financing, marketing and branding that is going to take time and considerable effort to accomplish.
Buying an established business removes the issues of startup and allows the prospective new owner to take advantage of the work done by the previous owner. Of course, this comes at a cost, but the business is already generating a profit and with a thorough review of the business finances, there is a more comprehensive understanding of both the actual profits and the potential for the business.
Making the choice to buy a business needs to start with a careful examination of motives, needs and understanding of the role.
Your Involvement
If the idea of being a business owner centers around having unlimited freedom to travel, spend time with the family or to simply enjoy life, buying a business needs to be done with this in mind.
Many small businesses have owner/managers or owner/operator types of models. This means that the owner is directly involved in the day to day running of the business, which is the opposite of what a buyer may want.
For those potential Minnesota business buyers that want to have freedom and not be directly involved in the day to day management, it will be essential to choose a business with an existing, effective management team that will stay in place after the sale.
The Risks
The best advice from a business broker is to know all the risks of the business and the industry and then decide if it is the right step to make the purchase. Simply looking at the potential or the current revenue of the company is not the most effective option.
Looking to buy a business should never be a gamble. It should be an informed, educated choice that is going to provide the buyer with a reliable source of income based on current information.
Finally, and this is also important for anyone in Minnesota, admitting what you don’t know about the industry or the business will be critical. This can help you to build up the skills you need or to bring in support to help in these areas, which should all be part of the plan when you buy a business.
