Buying a business is not an easy task. Statistics in North America have showed that for every 10 buyers actively looking for a business only one buys a business.In other terms 9 potential buyers never buy a business. So odds are against business buyers.
So what should a buyer do to buy a good business? The number one element is commitment. Buying a business should be the number one priority. Buyers should not be afraid to spend tremendous time looking for the right opportunity. The business buying process takes a lot of time and they is no way around spending tremendous time talking to business owners and brokers. If you are not ready to spend that much time then buying a business is probably not for you and there in nothing wrong with that. Recognizing it before hand will save you a lot of time and money.
If you are committed to purchase a business, then first spend some time thinking about what you do best, what you enjoy doing and what is in demand in the market. Most buyers neglect to take into account these three criteria when choosing what business to buy. This strategic thinking will help you make the best decision. A good business for you is a business where you will enjoy the day to day activities, a business where you are competent and a business that produces products or services that people want and are willing to pay reasonable price for.
After this strategic thinking, you should look at your budget. It is well known that there is very little financing for small business purchase in Canada. Most financial institutions consider small business purchase risky and require strict conditions to finance a purchase. Banks are generally happy to finance hard assets such as equipment and real estate but do not like to finance good will, inventory and receivables. In most cases hard assets are not worth much in businesses available for sale. Most of the value is in good will, which reflects the capacity to generate cash flow. So first work on your finances and know how much money you have aside or can borrow from your friends and family. Then and only then you can start searching businesses for sale on the Internet and contacting sellers and brokers.
For more information about the business buying process you can check our complementary web site.