Stealthy And Secretive - The Only Way To Buy A Business
When you were in college, you understood that if you applied yourself to homework, you would be far more likely to succeed. This holds true when it comes to buying a business for sale as well and you should conduct a lot of research in advance of making contact with anybody; indeed you should treat this as the most important part of the process. Due diligence is the traditional method of scrutinizing that mountain of paperwork and financials before you buy business assets, as here you are looking for accuracy and sustainability. This is indeed critical, but a lot of the information necessary to make a preliminary decision should be obtained before you even think about meeting the seller.
When you commence formal inquiry, all kinds of variables enter into the equation. The process could come to a conclusion at any time, should something untoward be revealed. However, the main thing to realize is that this entire process will consume many of your viable resources, of which time is the most precious. You will have to interact with many different entities. Apart from the seller, of course, there will be the buyer's broker, the seller's broker, an accountant, maybe a business valuation expert, a landlord, one or more crucial suppliers, a key staff member or two and so on. As the entire process, including due diligence, can take many weeks, it stands to reason that you should not begin the formal process until you are pretty sure that this business will stand up to investigation.
Does this mean that you have to smoke a pipe and have an assistant named Watson? Not necessarily, unless you understand that you have an initial process of due diligence to undertake, before you even begin to knock on anyone's door. You have to come up with a shortlist. Your list will include only business types that are truly suitable for you, after a significant period of internal soul-searching. You must know what is likely to motivate you to succeed and exclude everything else. Once you have done so and identified your geographical territories, you should start by identifying each and every business in your niche within those areas. Use other criteria to narrow down the search even more. For example, you might decide that a convenience store is only suitable in your eyes if it is placed on the intersection of two major highways.
Once you have your short, shortlist of potential candidates, your investigations must really begin. Use the power of the Internet and the true meaning of social media to reveal the good, bad and the ugly about each business prospect. It's amazing what you can dig up with a little bit of perseverance as you follow each information trail, making good notes as you go.
You will often be able to eliminate a number of potential candidates during this initial, exploratory phase. A couple of well phrased, anonymous questions should be posed to third parties who may be involved with that business. This will often reveal important nuggets of information. Time spent here will truly be money well spent. When you actually begin the journey along the formal road to buy a business, you will have a much greater chance of success.
About the Author
Richard Parker is President and founder of Diomo Corporation - The Business Buyer Resource Center, and his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business. Want to find out more about business buying strategies that really work, then look no further than=> http://www.diomo.com/
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