Are you in the market to acquire an existing business and wonder how to finalize your selection? After weighing all the pros and cons of the businesses that most interest you there is one important consideration that is often left off the list. Does the opportunity inspire you? Do the products or services they offer engage your imagination so that you catch yourself daydreaming about how to make things better? Is your blood pumping with excitement at the possibilities?
One of the biggest mistakes in purchasing a business is limiting your decision merely to the practical aspects such as the balance sheet, cash flow, customer base, and geographic location. The fact is, when you acquire a business, you are entering into what in all likelihood will be a long-term relationship and you are more apt to realize meaning and accomplishment from that relationship if you are passionate about it.
That is not to say you shouldn’t conduct due diligence to make sure the business is healthy, has a positive cash flow, and that you can visualize expanding its niche market. Proving the solvency of the business is essential. The last thing you want is to make a decision based solely on what you think the business can do, especially if it is not currently turning a profit. However, all things being equal, you may want to acquire a business where you can apply your unique skill set while meeting the challenge of growing your business acumen in a dynamic and interesting industry that you may or may not have specific experience to apply.
When planning your future, the last thing you want is to own a business that, while stable and profitable, fails to capture your enthusiasm and ignite your vision. Faced with a purchase decision, imagine yourself at the same company one year, 5 years, and 10 years into the future. If the thought of walking through those doors every morning for an extended period fills you with dread, you may want to reconsider.
On the other hand, it is equally important not to overestimate your ability to manage the business you are considering. It is important to sit down with a trusted advisor such as a business broker and honestly assess your skills so that you can eliminate the potential of getting in over your head. Leadership is a critical skill to possess, particularly after the purchase and during the transition period. Employees, vendors, and customers will be watching closely and their continued loyalty to the business will depend on the leadership style you display.
Buying a new business should be an exciting proposition that promises to offer you a lasting career. Take the time necessary to make sure everything looks good on paper and that it feels like a good fit at the same time.