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It takes a lot of determination and commitment to get a business off the ground and make it successful. There will be many long hours and upfront costs. This could be especially difficult if you have a family. Before buying a business it’s essential that you thoroughly research all aspects to make sure it’s a good fit for you. Here are some important questions to ask yourself before you buy a new business.
* Why do you want your own business?
* What kind of business do you want to start?
* Do you have the time to fully commit to making your new business a success?
* Where will you locate your business?
* Will you buy or lease the property?
* Is there a demand for your product?
* What is the cost of producing the product?
* Will you be able to make the product and still make a profit after your overhead?
Once you’ve answered all those questions, there are also some questions you should ask the previous owner about the business before you make the purchase, such as;* Why is the owner selling the business? Is it retirement, mismanagement, lack of demand?
* What is the business overhead? Ask to see the bills for at least the previous two years such as, utilities, cost of the lease, insurance, labor cost, etc.
When all of your questions have been answered and you still want to buy the business, you will need a plan to make it a success. That plan needs include room for important changes that could happen at some point to ensure profitability. For example:
* You may need to raise the price of the product to cover the cost of the overhead and labor.
* Be prepared to relocate if the cost of the lease is too high. Or perhaps it may be more cost effective for you to buy the property.
* Consider whether there are other services/products that you might offer your customers.
Finally, before you sign any contracts, it’s a wise idea to get the advice of a financial advisor and a lawyer. If you would like further assistance contact our office at (260) 497-9761 to schedule an appointment with our advisors.
