Is Buying A Business Right For You?

Business ownership may be satisfying and potentially, very profitable.  BUT IT IS NOT FOR EVERYONE!  Longtime employees are used to a steady paycheck, company-paid vacations, comp time, retirement plans, and other benefits which they sometimes take for granted.

Employers who work for large corporations or have attained management levels in smaller companies at some point typically consider becoming their own boss and the perceived freedom of owning their own company.  Business ownership involves risk and as easily as you can make a small fortune you can lose it all just as quickly.  If you are married or have a partner, both parties must also understand the risk factors and be unified going forward.  If you are not comfortable with the following risks and normal business ownership responsibilities then buying a business and being an owner may not be right for you.

  1. Cash Down Payment – You will need a cash down payment equaling    15-25% of the total sale price.
  2. Business Plan – You should enlist an experienced business advisor and must develop a persuasive business plan.
  3. Business Loan – You will have to qualify for a loan from a bank or lender.  Occasionally Seller financing is offered, but the same rules apply.
  4. Personal Consideration – You will now be responsible for paying yourself, your business loan, medical and life Insurance payments, and funding your own retirement plan.
  5. Personal Assets – You will most likely have to pledge your personal assets (home, etc.) as additional collateral to secure funding.  Potential Buyers who are uncomfortable with this level of risk should not pursue buying a business.
  6. Business Acumen – Business ownership requires experience in management, accounting, sales, marketing, human relations etc.  You will wear many hats and must be knowledgeable in all areas to succeed.

Business ownership can be an exciting, profitable experience for those who understand the risk factors and know how to overcome them.  If you truly are ready to embrace business ownership you will enjoy determining your future destiny.