Top Reasons for Buying a Business
Established Customer Base
Do you know how much it costs to build a customer? On average a customer will have to be contacted 7 times before they will buy from you. Does this sound like something that will be easy to do. No, its not, any of you that have tried building Customer Base have found just how difficult it can be.
Now when you Buy a Good Business, the building of the customer base is already done. All you need to do is set up the systems that will keep these people happy and use the systems in place to continue to build your customers.
They already know the ropes, the systems and players involved. This takes away a training period, leaving more time for maintaining client relationships.
Ability to interview the employees in the buying process will allow the buyers to see exactly what he/she is getting into. Who the key employees are and how everyone fits together.
Position in the Market
Suppliers, Clients, Competitors, they all know the name of your business already, survey all these prior to purchasing the business and you strengthen your ability to take the business from Good to Great!
Systems are what run a successful business, managers and employees just run the systems. Steven Covey wrote of this in his book, “7 Habits of Highly Successful People.” In his book, Covey reveals how McDonald’s is able to reproduce the same flavor, service and atmosphere in every restaurant around the world. No matter what McDonald’s you walk into each burger will taste the same and the fries the same consistency, systems design to be run by the lowest level worker, at no point is the running of the business dependent on an individual person, possibly a position, but not a particular person. The systems running the business, setting up systems are crucial to the success any business, when buying a business, these systems may already be in place. If these systems are not in place and you can recognize where and what systems to set up you can take the business from Good to Great.
Financing a Business Purchase
OPM (Other Peoples Money) One of the most powerful ways to use leverage. Without risking as much of your own money you are more comfortable investing in business. Why? Because the investor or bank will need to see audited financial statements from previous years backing up the success of the business. Banks don’t just give money out to anyone, especially for any reason, if a bank is willing to finance the purchase of the business then you know the financials of the business you are reviewing are in good condition and look promising. Almost like a second opinion, it is that extra confidence boost that will make you more comfortable with the decision to buy.
Most Business owners will offer a transition of ownership, showing you the ropes
Can you believe it, they will train you how to run the business. They will show you the ropes, and then, they might be willing to stay on as a consultant afterwards if you have any questions. Now you have a coach who ran the same exact business to help you out.