Many buyers think the best important aspect of buying a business is the means. A six figure salary after loan payments can be an irresistible lure. Buyers often imagine what the money can give their family and imagine the future through rose colored glasses. Take your eyes off the fantasy and prioritize the reality.
Do you like getting out of bed to bake bread or milk cows while the chickens are still enjoying their REM sleep? Perhaps the scenario seems great in the light of full pockets burning with cash. But cash will only burn in ones pocket for a while before it becomes a heavy load to carry. Money can not buy you love and it can not buy you happiness if you hate your job.
This scenario has happened greater than once. Many brokers see this over and over. Among my buyers traded his pension to buy a business. His family was excited about having dad around more as the hours were considerably lower than those he spent in his corporate job. But he hated it. He was unhappy and his family shared in this unhappiness. After only five months of awaking at 4:45 AM, he asked me to sell business. He wanted it sold now, and he wanted to pay to be eliminate the job. On top of whatever penalty there may have been for liquidating his pension, he asked that we lower the asking price on the business by a total of $75,000 during two months. A low-ball offer was accepted and the business sold for exactly $100,000 barely had been funded it eight months earlier. Perhaps business was worth less as, during the course of ownership, the business had been neglected and not grown.
When you are looking for a business, think about what you will be doing. Do you like being outdoors or are you a suit and tie kind of person? Do you like to speak to people? Are you good at resolving customer complaints? Do you wish to be home while your kids are awake? Will working weekends change your life in a manner you can tolerate? Will the smell of pizza on all of our clothes be something you can tolerate on a long term basis? There are a great deal of questions that will need to be considered. If possible, spend time at the business before you buy. It may be unlikely that a buyer will be able to work with the team before the papers are signed, but one can ask the one in charge about them and perhaps watch them in the parking area before or after work. Retail situations open themselves to mystery shopping, which is a great way to leaner about your business. But remember never say anything to the owner inside the store or talk to the employees about anything that a usual customer would discuss.
Take your time in selecting the right business. Do not be lured in by deals without undergoing your mental due-diligence look at your future enjoyment as this business owner.