Buying an existing business seems attractive, but actually only a small percentage of those who seriously consider it end up doing it successfully. It usually takes much longer to make an appropriate purchase than it does to conduct a job search. Most potential buyers focus on the two biggest initial problems: finding a suitable company that’s affordable and arranging the financing, assuming they’ll be able to operate the business successfully enough to achieve their financial goals. This assumption is sometimes naive and leads to disaster.
The first consideration in thinking of buying a business is to see whether or not it’s really an option worth contemplating because, at the very least, it’s usually a time-consuming option.
The search phase takes many months of in-depth screening of several opportunities to identify one or two that meet the buyer’s key criteria. Then the buyer focuses on one business, getting the potential and problems assessed by an expert, the finances evaluated by an accountant, and the complex purchase and financing documents drawn up by a lawyer. These tasks are time-consuming and costly. Success depends on the right timing and some good luck. Many potential buyers have gone through this process and gotten into final negotiations, only to have someone overbid them at the last minute.