In our previous installment, we touched on the benefits of buying an existing business, determining client readiness to buy, and organization. With such a small percentage of business searchers completing the purchase, it’s important to get clear on criteria and what is going to be the best fit for your client’s lifestyle and abilities.

Choosing the Right Type of Business

Many times, buyers will spend too much time looking for what they think is the “perfect” business, and end the search prematurely after realizing it doesn’t exist. Helping your client establish the right type of business to target will not only get them closer to a purchase, but it will open up options that fit within their ideal without having to hit every checkbox.

Key things to consider:

• Location

• Industry

– Fit with experience
– Match to interests

• Purchase price

• Fit with buyer’s goals

– Income potential
– Future potential
– Supports lifestyle

• Independent vs. Franchise business

The intangibles involved in selecting an appropriate industry and type of business can have an impact that lasts far beyond your first day on the job. Personal interest and passion are non-negotiable elements in a successful business venture.

When the initial excitement of becoming a business owner wears off, your clients will be left with the task of actually doing the work, day in and day out, for as long as they own the business. If the kind of work your business does isn’t very interesting to you, you’re setting yourself up for disappointment and frustration down the road.

A lot of new business owners begin the process by conducting an honest assessment of their interests. In fact, the most successful businesses often begin as a hobby which eventually inspires the business buyer to transition into ownership.

Another intangible has to do with the owner’s skill set. Theoretically, it’s possible to buy into a business in which you have absolutely no skills or experience. The problem is that the business may not be able to endure a lengthy learning curve.

For example, if someone with no previous skills in the salon industry buys an existing hair salon with the intention of getting trained and certified along the way, a major issue would be how the business would survive while the owner learns the ropes. Would other employees fill the gaps, or is it a better idea to work alongside someone else before jumping into business ownership?

As you assess your clients’ interests, ask them to be realistic about their skill levels. If their chosen field or industry requires training, factor it into their business plan from the start, and make allowances to compensate for gradual integration into daily operations.