We have helped some clients find the right business within six months while, for other clients, it has taken over three years.
The key phrase is ‘the right business’; I’m sure we could speed up the process if our aim was just to help our clients buy ‘a’ business, but that’s not our job.
In this video I explain why it's important not to rush into buying a business, and share four tips for managing risk during the business buying process.
So, how long does it take?
Buying a business should take as long as it needs to take to find the right business for you.
Be prepared to invest in independent advice from an advisory, valuation or accounting business, to pressure test your views, support your decision making and balance your important emotional reaction with objective data.
A key tool for assessing a business and determining whether it’s right or wrong for you is what I call the funnel process.
[We have created the 10-step Business Buying Funnel to help readers understand and apply this process. Click on the link or image for a full explanation.]
Imagine the top of the funnel is wide and has a screen which sifts out businesses which don’t meet your requirements.
These requirements may relate to:
- Size and turnover
- Product or service
- Customer base, etc.
Once the various sale opportunities have been ‘sifted’ you are left with the select few businesses which meet your requirements.
The funnel process allows you to do some initial testing and assessment upfront, against your clear objectives, and determine quickly whether the stars will line up or not.
Resources to help you manage the purchase process
We have produced a number of free resources to help our clients and subscribers when buying a business:
- Buying a small to medium-sized business eBook
- How to conduct due diligence on a business purchase eBook
- Business Buyer’s Checklist
- Buying a Franchise Planning Sheet
- Buying a Business Planning Sheet
- Due Diligence Checklist
You can download these and other free resources from our online Resource Library.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.