If you are an existing business owner, you may be considering jumping into your second or third investment. Before you do something as drastic as buying a whole new business, you need to consider a range of issues that could make the difference between celebrating your new acquisition or mourning it.
The opportunity to buy into another business will always come across your desk at least once or twice, and of some of these there will only be one or two that feel right for you. Buying a business is no easy feat, and there are things that you need to consider before you say yes and take that box. You may already be a skilled business operator, but here are some things to consider before you start buying another business.
- Take a look at your current business. Before you buy another one, you should look at your current business and figure out where it’s going. You might have money laying around that you are thinking about using to invest, but you must be certain that you won’t need it for your current business. The last thing that you want to do is leave yourself short for your initial business only to find something else and find the first business failing. You have to be practical here, because you really do want this to go well.
- Research the new sector. Are you happy to invest? Have you established how much money you have available? Is your first business going to suffer as a result? If you’ve managed to answer all of these questions with confidence, then make sure that you do some research into the new sector. If the new business you are buying is not in the same sector as your existing business, then you probably have a few things to learn along the way. You need to make sure that you can add value to the company rather than be completely retrained. If the skills that you bring are things that will help to increase profit margins without learning a whole new range of skills from scratch, you’re on the right track.
- Make sure that you are available to do this. You have to be available to actually run this business, and that means checking whether you have the time to give it. Many businesses are very time consuming, and it’s very likely that you’ll need to spend some time managing certain aspects of the first business. If you can’t spread yourself too thin, make sure that you have a partner with you who can run one of the businesses while you are running the other. You should also be able to trust your existing management team to pick up the slack if you are not in there all the time. Spreading yourself too thin is not a good idea, because all you’re going to do then is put both businesses in jeopardy.
Take your time with this purchase so that you can make the right decisions for your existing business and your new one!