One problem which a lot of potential business buyers face is that they set a lot of unrealistic goals about the business they are trying to buy. Even though guidelines are important, it doesn’t mean that the goals set are done unrealistically. This means that if you are willing to buy a business, which is operational for 10+ years, has had just one owner and retirement is the only reason for selling it, then you would be disappointed.
Instead of setting the rules that are narrowed down drastically, eliminating any prospects, the best thing is to set achievable business goals when selling it.
Even though the business’s financial strength is important, you need to be concerned more about the future. Whatever is done is done and as a business owner, you need to focus as to how the business can grow and what it can achieve under your ownership.
You need to have stringent rules which businesses need to have in place in order to buy it. Also, it has to be right. Some of the rules are as follow:
Must be driven by Marketing and Sales
The business needs to be marketing and sales driven. Generation of aggressive sales and marketing initiatives would help the business earn more value.
Check Businesses with High Margins
When it comes to the revenue side of the business, rather than taking it over, you can grow the top line, having a business with good margins is always good enough for exploding the ultimate margins.
Creating a Demand for a Service or a Product
Well, being a seasoned business owner, I know how important this one point is here. The reason is that if the market is not offering you appropriate money, then you would have to spend a lot of time in trying to create its awareness and demand at the same time. Unless, you can grow your business with a lot of budgets, you cannot withstand less revenue. The business has to offer unique services, with the help of which you can gain a competitive advantage, leveraging the growth.
Don’t Strive for a High Price
In case, your business is selling products due to a lower price structure, it’s not a good enough business model. This means that unless you are generating a lot of money with a lot of profits, you cannot grow the business. Also, you are in line with the competitors and are not faced with going back to business every day.
Own Something Unique
Always look for something exclusive to add to your business. It does not necessarily have to be a product, but it can be a location or a process which no one else is offering. For example, if you have a footwear business, you can have the benefit of the direct relationships and capital for purchasing the overstock and end of lines from various manufacturers. The retailers of the competitors buy the same merchandise for paying at least 25% more, translating an enormous retail difference. This way, the prices offered are 3 times less than the competitors and this would automatically drive more sales and business.
Set Your Own Rules
Whatever the rules you set for establishing the business strengths, you don’t have to set crazy parameters that are not met. However, try to have flexible and reasonable goals. After you have set your goals, you can identify the entire process and can thus reduce the time spent on the potential business which is not appropriate for you.