How to Define Which  Business is Right For You cover image
22 Aug 2019

How to Define Which Business is Right For You


Humanity and our environment are going through historically important changes, which we need to navigate more carefully. Technology can leave you vulnerable, but it is not the only challenge we face in business today.

I grew up prior to computers and the internet, we had no mobile phones. What we had, was a much simpler version of now. It offered us certain benefits – TRUE, quality leisure time was one of those. We never had to check emails or text messages; things just had to wait for us to get back to work.

Today, our leisure time is not comparable to pre internet and mobile phones. Your brain does not get the same opportunity to go into rest mode. Gadgets constantly require our input and attention. Technology has spread itself across our existence like a huge fishing net – and it can be highly irritating. Fake news, cyber crime, hacking, clickbots etc, are all new challenges that business until recent years had never heard about. These new area problems can ruin businesses that have become a target. Anti Virus software will not be a match to the latest hacking tools.

There is a need for diversification in the offering of small business, to align with the changes to our lifestyle over the last 10 years. Pioneers and Innovators are needed in small business today, not just in the corporate sector.

We have an increasingly unwell society and an increasingly unwell planet. Todays’ children do not get the physical exercise we once did. Yet, physical exercise is mandatory for a healthy brain development. The brain develops with exercise, as exercise stimulates the cerebellum in the brain.

A business focusing on the shortcomings we experience today, would make an ideal ethical choice. How will it perform financially? Always run a feasibility study when you put your finances at stake.

The quality of our supermarket food products has deteriorated. Preservatives and traces of many poisonous chemicals are found in the majority of what we put into our mouth each and every day.

What has all that got to do with your urge to buy a business?

Everything! You have to adapt to current needs and market factors. What was an appropriate indicator for a good business 5 years ago, may no longer be of any relevance today.

I always remind people of the Kodak collapse. One of the worlds best known brands until the mid to late 1980’s. Yet, new technology wiped it out almost overnight.

Looking for a business opportunity, evaluate the lifestyle impact of your decision.

Will you have weekends to yourself, or does the business require a weekend roster? How do you feel about the product or service you will be dealing in? Does it meet your ethical standard? What is the industry growth forecast? Can I add services or products to the business to suit my location? Does my purchase contract prevent me from certain add on idea’s? Is the lease secure and fair value?

What about the financial investment that you are about to commit? Have you allowed for all costs, including some initial operating cashflow to cover the first six months? Worked out all wages, taxes, utilities and other trade associated costs?

The business that you are most likely to succeed in, is the business that you actually have a passion for. It may not be the style of the business, but the opportunity to grow a small business into a bigger business with a new idea.

Most business buyers assume they can do things better than the current owners. This often rings true, as the current owners may just have had enough and have shown little love for the business of late. Just don’t jump in blind, the current owners may know something that may impact the business in future. Do your due diligence prior to the purchase and make it all inclusive. Leave no stone unturned.

Finding a flaw with a business is not a bad thing. It may be the best buying opportunity. As long as you are confident that you can work around the existing flaw, you may pick up a bargain.

In many fields, workplace security has dramatically declined and wage growth has been non existent since 2009. Being successfully self-employed can offer you, more job satisfaction, more job security and leaves you less vulnerable to loss of income.

Many small businesses fail in their first year. Should that worry you? NO! This fact simply should alert you to the potential pitfalls and help you avoid mistakes made by some of the failed businesses.

Owning a business can bring a certain feeling of freedom with it. It is your chance to find your calling and grow to financial success. It can also be the mistake that took away the family home.

Don’t over commit yourself. Don’t be afraid of the new skills you may need to learn, just make sure they are skills that you are not afraid to learn. Create a business buying strategy, similar to planning your life. Don’t treat your business purchase as a separate entity, see if it can enrich your dreams and compliment your life goals.

Use the internet to research your potential business purchase. Search the actual business and see if there are “independent” news articles or reviews, these may provide a clearer picture than the one you may be presented with by the seller.

Once you found the right business, having done your research, just try and run it the best way anyone could run such a business. Put your shine on it, its not just an income producing vehicle – the business now is simply relying on you. Enjoy the ride and live your dream. Run it like an athlete, always aiming to improve performance.

As an Insolvency advisor and business owner, I have seen more cases of business going bad than most people. Good operators and good businesses are not spared from unfortunate circumstances. We can’t fool proof everything, but we certainly can take many measures to reduce risk.

The vast majority of insolvency cases are not made up of good operators, but often those who have over committed and perhaps those who have a lack of understanding of  what it takes to run and grow a business.

If you need help to purchase or sell a business, feel free to contact me initially via email, outlining your situation.
Troy Eichelberger
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