How does one go about choosing a business to purchase or planning a business start-up? Choosing the right business is critical to one’s success. Studies have shown that nearly 1/3 of small business fail within their first 2 years and many fail within 6 years. Therefore, it might make sense to look for a business that has been operating successfully for at least 6 years. There are many things to consider when researching a business to purchase.
Money of course!: How much money will I make with this business? The very thing many entrepreneurs are looking for when they purchase a business is their return on investment (ROI). They want to know what to expect in profit.
Investment: OK! Now, how much money do I have to invest up front? If you are limited in resources, you might need to start small and build the business slowly. Or, maybe you are able to dive in and launch your business in style, with the latest in technology, equipment, furnishings and plenty of products in stock.
A Good Market or a Unique Niche: Another very important thing to consider is the product or service. Is it a fun novelty now, soon to lose popularity? If the business is successful because of a unique niche, how long will there be a demand for your product? Will it be easy to phase in an alternate product or service?
Consistent Growth: You might be looking for a business that has been around for a while and shown consistent growth over the years. Rapid business growth means there is a market demand for the product. Different products and services have experienced different rates of growth during different generations of time.
Risk of Failure: Certain industries have a greater risk of failure than others. Is there too much competition in the area? Is there a demand for your product? Or, has something better been introduced to the market? Are there issues about the business that you didn’t find out before the purchase? Do they have a bad reputation with vendors, customers or both?
Obligation: How much of your time is the business going to take? Do you need employees? Will you be able to manage the business so you can have some time off, or will the business end up managing you? You will want to choose a business that fits your lifestyle.
Choosing a business takes time and research. There are a lot of things to consider including the profit compared to the financial investment; the rewards compared to the challenges, and the amount of potential risk compared to the potential return.
Bill Bartmann is a self-made billionaire who has created the Billionaire Business System, a series of books and seminars that teach you what you need to know about succeeding in any area of business. Visit Bill Bartmann’s website http://www.billionaireu.com for real business guidance to succeed even in tough economic times.