Everyone is an expert it seems at buying a #business. Particularly those who have no skin in the game like family and friends. The single most important thing in #buyingabusiness is being educated. The best resource I found when I first started in this business was http://WWW.DIOMO.COM . Richie Parker’s course was a resource I still work from as a #businessbroker and a place I point buyers to who are serious about the process and want to to it right. Below is an excerpt from his book and course.
10 Commandments of Buying a Business
Commandment # 1 – Pay For The Past, Consider The Present, But Buy It For The Future!
The past financials will help determine the purchase price, but they do NOT guarantee what the business will look like in the future.
You must evaluate the business for what it can expect to provide you with after you buy it.
Commandment # 2 – Buy A Good Business and Make It Great!
All good businesses possess certain common features; you’ll learn how to determine whether the one you’re considering already has these in place.
Commandment # 3 – Ingredients Are NOTHING Without A Recipe.
After the purchase, can you put all parts of the business together into one cohesive unit poised for growth, and at what cost?
Commandment # 4 – Fall In Love With the Profit, NOT the Product!
You’ll learn how this traps so many others when they get emotional about the business before they buy it and their judgment is forever clouded. You must remain objective!
Commandment # 5 – Do What You Do Best and You’ll Manage The Rest.
Making certain that you already possess what the business really needs.
Commandment # 6 – Autopilot – (can the business be put on “cruise control”?)
In order to grow any business, you must take advantage of technology – can this business improve it’s systems and run on its own so you can focus your attention on driving the profits?
Where can you access the technology and what are the costs?
Commandment # 7 – Determining What Holds “The Gold”.
Nearly all businesses possess certain components that the current seller has not exploited.
You’ll learn how to identify these sometimes “hidden” values.
Commandment # 8 – The Three Personal Things That Every Business Must Possess.
You MUST be able to explain it in simple terms to others.
You MUST be able to explain it with great enthusiasm.
It MUST be a business that makes you very proud.
Commandment # 9 – Evaluating and Identifying What’s Not Perfect Yet.
No business is perfect and every business needs attention. Sometimes the smallest improvements yield the greatest results. You’ll learn how to pinpoint all of them.
Commandment # 10 – What’s It Worth To YOU?
Only you can truly evaluate the benefits of any venture. You’ll understand how to take a realistic approach to this crucial exercise.