| For many people, buying an existing business | | | | important factor in deciding whether or not to |
| sounds easier than starting one from scratch. | | | | buy a business. After all, a primary reason you're |
| When you buy a business it is already established. | | | | buying a business is to improve the quality of |
| It has an existing customer base and built-in cash | | | | your life. But remember that running a small |
| flow.It sounds like the perfect answer to all your | | | | business will probably require long hours and |
| problems. No more 9 to 5. No more working for | | | | impose stresses on your family. You need to |
| someone else. No more rat race. No more | | | | determine how owning a specific business will |
| layoffs.But, before you rush in and buy an existing | | | | affect your life and your family's happiness.To do |
| business you have to make sure that the | | | | this you need to construct a lifestyle profile by |
| business you buy is right for you and that you're | | | | asking yourself some questions. First, ask what |
| right for the business. Otherwise, those old | | | | your business and personal reasons are for buying |
| problems can become even bigger headaches: No | | | | a particular business; second, ask how your |
| boss means no regular paycheck. That 9 a.m. to 5 | | | | business ownership will affect your family's lives; |
| p.m. workday can be replaced by a 5 a.m. to | | | | third, ask how it will affect your leisure time; |
| midnight shift, seven days a week. Layoffs or | | | | fourth, ask what the longer-term lifestyle |
| downsizing can be replaced with the scramble to | | | | consequences will be; and fifth, ask how a possible |
| meet the monthly payroll.The upside is that if you | | | | business failure would affect you and your loved |
| choose the best business for you, and if know | | | | ones.Another critical consideration for you is |
| the secrets of handling the purchase the right | | | | money. This involves finding out how important it |
| way, you can enjoy the pleasures and the profits | | | | is for you to hear the cash register ring. How |
| of being your own boss without having to go | | | | much income do you need to be successful, |
| through the groundwork process of actually | | | | secure, and happy? Will the business you're buying |
| building it from scratch.If you seriously want to | | | | really provide what you need?All these exercises |
| buy a business, you have to ask yourself, "What | | | | may seem overly time-consuming and too |
| kind of business is right for me? For example, | | | | focused on personality rather than on the |
| should it be a one-person operation? Perhaps, if | | | | numbers. But the truth is that your personality |
| you really like working alone. But a lot of people | | | | makes an enormous difference in whether or not |
| who take the one-person route find the work | | | | you will be successful as a business owner.It's |
| excessively demanding, the silence deafening, and | | | | critically important to look as closely at your own |
| the loneliness disheartening.Before you decide to | | | | strengths and weaknesses as at those of the |
| buy a business, you should go through several | | | | business you're considering. The alternative is to |
| important exercises. First, find out what size | | | | leave your business career and your personal |
| business you can afford. In making that | | | | happiness to emotion, snap decisions, and chance. |
| determination, understand that most small | | | | It's better to wait a little longer until you find the |
| businesses don't sell for cash. Many people | | | | right business to buy, rather than commit yourself |
| purchase businesses only to find out later that | | | | to one that will feel wrong every day you go to |
| they paid too much.There is a key rule of thumb | | | | work.Even people who make a serious |
| to remember when you're buying a business; the | | | | determination that owning a small business is right |
| rule of two-thirds. This rule states that a business' | | | | for them often run into trouble. In fact, studies |
| cash flow must service debt totaling two-thirds of | | | | show that of those who seriously look for a |
| the sales price. In other words, any business you | | | | high-profit small business, only one person in four |
| buy must have enough cash flow so that after | | | | finds one. The secret is to look for your future |
| paying expenses, including your salary enough is | | | | business in the right places. And that's usually not |
| left over to meet debt payments.When you find | | | | in the "Business Opportunity" section of the |
| out how much cash you have to invest in a | | | | newspaper, which advertises more "lemons" and |
| business, multiply it by three. That will give you a | | | | "plums."One place you might look is at a business |
| rough dollar estimate of how much you can pay | | | | brokerage firm. But you should know that your |
| for a business. How do you find out how much | | | | odds of landing your ideal business through a |
| cash you have to invest?First, subtract your | | | | broker are no less risky than flipping a coin. Some |
| liabilities (mortgage, debts, etc.) from you assets | | | | brokerage firms seem to peddle a lot more dogs |
| (cash, securities, real estate, home equities, | | | | than diamonds in the rough. In contrast, other |
| automobiles, etc.) The number you come up with | | | | brokers concentrate on solid, profitable businesses. |
| will be your net worth.Then, you'll have to | | | | But their commissions depend on getting the |
| determine how much of your assets are liquid; | | | | highest price possible, so they're in the seller's |
| either cash or, as with stocks and bonds, quickly | | | | corner, not yours.The truth is that most of the |
| convertible into cash. That will show you how | | | | small businesses you would want to buy are |
| much you can put down on a business. But | | | | located in the hidden market. How do you tap into |
| before you rush out and buy a business, you | | | | that market? By bypassing the middlemen, and |
| need to make sure you possess some very | | | | going directly to small business owners. You can |
| important personal qualities such as, being goal | | | | find them by doing the following:First, spend an |
| oriented, persistent, independent, profit-focused, | | | | orientation day at your local library and identify |
| self-confident, risk-oriented, self disciplined, | | | | and become familiar with research sources. |
| street-smart, and opportunistic.The next think you | | | | Second, decide on an industry or two to target. |
| need to do is to determine what kind of business | | | | Third, use directories to find companies that are |
| is best for you. To do this, make up a list of your | | | | possibilities for you. Two good places to start are |
| business "wants" and "don't wants." For example, | | | | "The Guide to American Directories" and |
| how do your feel about travel? About | | | | "Directories in Print," which identify regional and |
| commuting? About hiring, firing, and managing | | | | state directories that profile different companies. |
| employees? About long hours? About dealing | | | | Fourth, create a research worksheet for each |
| directly with customers?Imagine your perfect job. | | | | company you're interested in. List the company |
| Concentrate on your thoughts and activities, and | | | | name, address, phone number, president or |
| not so much on responsibilities. Write down your | | | | owners, industry, products and services, number |
| thoughts and images as fast as they occur. A | | | | of employees, sales, and other data.As you |
| few days later, visualize another, different ideal | | | | continue to gather information, you'll be able to |
| job. And then repeat this exercise.In analyzing | | | | discard some companies and upgrade the most |
| your perfect jobs, you will probably find that they | | | | promising ones. When you have a solid list of |
| have a definite pattern, one that will indicate your | | | | promising small businesses that you're interested |
| interests. This analysis will help you find a business | | | | in buying, you will be ready for a crucial step: |
| whose needs match with what you like to do. | | | | contacting the owners which we will cover in part |
| That's vitally important, because for your business | | | | 2.Copyright©2006 by Joe Love and JLM & |
| to succeed, it will require that you possess | | | | Associates, Inc. All rights reserved worldwide.Joe |
| specific skills.Once you know the type of business | | | | Love draws on his 25 years of experience helping |
| you want to buy and have identified your specific | | | | both individuals and companies build their |
| skills, you need to decide if you would have to | | | | businesses, increase profits, and achieve total |
| move the existing business. For example, it's hard | | | | success. He is the founder and CEO of JLM & |
| to relocate a retail business because their success | | | | Associates, a consulting and training organization, |
| is often tied to location and loyal customers. But | | | | specializing in personal and business development. |
| for most other businesses, location is not as | | | | Through his seminars and lectures, Joe Love |
| important. You need to ask yourself the following | | | | addresses thousands of men and women each |
| questions: Would a move result in cost reductions? | | | | year, including the executives and staffs of many |
| Would a move result in a better labor market? | | | | of America's largest corporations, on the subjects |
| Would a move result in a better business climate | | | | of leadership, self-esteem, goals, achievement, |
| or a better economy?Lifestyle is a very | | | | and success psychology. |