If you have decided you would like to buy a business and take over an existing establishment, it’s important that you carefully consider all aspects. You have to make sure that whatever business you want to buy is a sound investment and won’t cause any future financial problems for you.
The business’ accounts and financial documents can give you a good idea of where the business currently stands and how it has grown. However, you should delve a little deeper as there are other factors at play when it comes to the success of a business.
Buying a business can be incredibly rewarding, but you should be aware of how much growth there is still to achieve and how much more you could get out of the business.
The location of the business
It can be easy to get caught up in the figures and how the financial documents look when you are evaluating a business’ success. While this is important, there is also so much more to consider.
Where the business is located could play a huge factor in its potential growth and success. It’s key to get a clear picture of how the business performs in its area; what is the neighbourhood like? Are there plenty of friendly shops and other establishments, or is it a bit isolated?
This is important because it can affect the footfall of the business, which in turn will impact the sales and growth. You should consider visiting the business on different days to see how consistent the footfall is, as this can give you a great insight into the day-to-day running of the business. It can also give you an idea of any challenges you may face in attracting new customers.
The customers’ perspective
It might be worth taking on the role of a mystery shopper before you decide to buy the business. This can work for any type of business, whether it is a bar, retail store or salon.
It’s important that you get a feel for how organised and professional the business looks to a customer. This can form the basis of your plan for when you do eventually buy it, including whether any changes need to be made to staff or the processes.
What’s more, the more information you can gain about the business before buying, the better you can negotiate a good deal!
Your biggest challenge going into any business is the competition. You should carefully assess what other similar businesses are in the area, and how they compare to the business you’ll be buying.
It may throw up some ideas of how you can make sure the business is unique, or what changes you can make to ensure the business is better than your rivals!
Posted on November 10, 2019 | buying a business, value a business, success