If you believe you have the skills to be an entrepreneur but don't want to start from scratch — or just don't have a new concept worth launching — you might be a good candidate to purchase an existing business. While purchasing an existing business entails a higher initial investment, it also entails a lower risk than starting from scratch. Financially, you're looking at actual profit and loss records rather than guesses, and there's a proven track record of sales. You may also be able to obtain lucrative patents or copyrights, or you may be able to use your skills to propel a sluggish business in a new path.
It's a frequent fallacy — even a cultural stigma — that if a Business For Sale Tauranga founder decides to sell it, something must be wrong with it. Either it's about to fail, the finances are in horrible shape, or the founders must know something you don't. In reality, entrepreneurs sell their companies for a variety of reasons. They may be at a new period of life, and the business's requirements no longer match their way of living. Perhaps they've become tired of the current business strategy, or they're enthralled by a fresh concept. They may have launched a terrific company, but it is no longer one they are enthusiastic about running on a daily basis. Even when a founder is ready to move on, giving up something they developed from the ground up is a difficult decision. A founder can go on with confidence, knowing that the firm they founded is in excellent hands, by finding the proper buyer — someone with the passion to take the business to new heights and the strategic acumen to make the business operate well into the future.
Start by putting out some feelers in your immediate area. Are your buddies ready to move on to their next project after launching a successful app? Do you work for a small business that you enjoy and think the owners might be willing to sell? If you prefer to keep things small and local, perhaps the owners of your favorite neighborhood coffee shop are ready to sell and relocate to Bermuda? There's no harm in asking if you know of a Buy A Business you'd like to own. From there, go out to your business contacts and conduct careful research on the internet. It is a recognized online marketplace for buying and selling businesses. But beware: for every real chance you'll find online, there will be dozens of bad offerings waiting for you.
Consider employing a business broker to prescreen firms for you, assist you to narrow your areas of interest, and negotiate the terms of your final business purchase if you've done some research on your own and haven't discovered the business you're searching for. Business brokers are similar to real estate agents in that they charge a commission—usually around 5% to 10% of the transaction price—and are only paid when you buy a business. While the benefits of using a broker may be worth the money, proceed with caution and don't be pushed into making a hasty decision.
Related Blog: How Can You Get a Good Deal On a For Sale Business?