The idea of owning and business and being able to make decisions and have the freedom to do what you want in your career is a big attraction for many people in Minnesota. Knowing if you are the right match for a particular business, or even if you are a person who will enjoy being a business leader, will be critical in taking the plunge into business ownership.
Unfortunately, too many people who decide to buy a business don’t take the time to consider these important issues. They often have a very misguided impression of what it will entail being a business owner and they may quickly find that what they assumed they were getting into is nothing at all the reality of the position.
Owner or Owner/Manager
There is a difference in being a small business owner and being a small business owner/manager. Many small businesses are owner/manager models, where the current owner is also the manager handling all the day-to-day decisions and problems with a very active role in all operations.
To take on this responsibility is a big step without a lot of freedom, very little in the way of time off and often a very steep learning curve. Many of these businesses will be sold with the current owner staying on to train the next owner, but that will all need to be considered in the negotiation when you buy a business.
Understanding of the Industry and the Business
Even if you are going to be more of an owner and less of a manager, which usually means a successful and trained management team is already in place and remaining through the sale, you still have to make decisions based on the business as well as the industry.
Often individuals buy a business because of an interest in the industry, but without any real working knowledge. Take the time to research the industry. This includes trends in the market in that sector and even changes that are being anticipated in the future to determine if this is still a business you want to consider.
Where Do Customers Come From?
By understanding the current target audience for the product or service the business offers, you can get an idea of where you can expand and what potential there is for growth.
Not being sure or failing to have a plan to continually increase the customer base when you buy a business is a very common mistake. Without this information in place, even the most profitable businesses in Minnesota will see a drop in revenue after the purchase, which can create cash flow problems that put the new owner in a very difficult spot.