According to the article, “Brower: So you want to buy a business here?” by contributor Patrick Brower on www.skyhinews.com, many people appear to be under the impression that starting a business from scratch is cheaper than buying an existing one. However, Brower argues that, after you consider the longer-term costs (i.e., about three years’ worth), buying a business that has already gone through growing pains and costs is just as reasonable as starting one from the ground up. As such, for those who are considering buying a business, such as a carwash, Brower offers a few tips:

  • Make sure you enjoy the mission of the business. It’s important to enjoy the nature of the work, because when times get tough, the enjoyment you get from the job may be the only thing that carries you through those hard times.
  • Talk to the customers. Get to know the business first by talking to its existing customers. Are they pleased with the company? Do they have any suggestions for how it could be made better? Why do they patronize this business as opposed to another?
  • Spend time working in the business you want to buy. If possible, you should consider working at least a week or a month in the target business in order to understand its operations and mission. This will help you know what questions to ask when doing your due diligence in considering the purchase. In the case of a carwash, if you are new to the industry and can’t work at that specific carwash itself, consider working at another one to get a feel for the industry.
  • Understand the business’ weaknesses before planning growth. Buyers often have plans to expand a target business because they see a great opportunity for it. But, before doing so, you need to know what weaknesses you can strengthen in the business first. Can you expand on the core mission? Who is the competition, and are there any changes in the market? Consider each of these facts before buying.
  • Know the employees. Ask about the key employees in the business. You need to get reassurance that they won’t decide to quit as soon as the sale is announced. This is a very key point to consider.
  • Complete a benchmark analysis. Find out if the company you’re considering buying is operating at the levels of expense and income comparable to the industry’s standards. This is called benchmarking and it should not be difficult to find benchmarks for the type of business you’re looking into.
  • Don’t pay too much. Judge what you should pay based on the cash flow of the business. Be sure to look at the books and determine the numbers, perhaps with the help of an accountant or bookkeeper.
  • Don’t be afraid to ask for help. Buying a business is a big decision and should not be made lightly. There are many people out there who can help steer you in the right direction. All you need to do is ask.

Read the original article here.