There are several ways to go into business - first - to start your own. We talked last week about the hurdles there."And if you decide to go with purchasing an existing business, we recommend that you seek the advice of a business evaluation professional," said Kevin Matsuura. "This person will analyze the company's financial statements as well as assess the value of the physical assets of the business. And this will give you a better idea of what a fair price would be for that business."
Let's assume for a minute you decide to buy an existing business. What are the questions you should ask yourself?
"First decide exactly what product or service you want to offer and really make sure it's something you're passionate about," said Matsuura. "Second we recommend you choose a low-cost business model. And what we mean by that is, nominal start-up costs and monthly manageable overhead costs."
The important thing, according to Matsuura, is to get professional financial advice. Many of the CPA firms in town have just such experts available. But there is at least one more thing to consider before buying an existing business.
"Third, make sure the product or service is both continuous and granular and this will assure that the business can survive through the inevitable downturns in the economic cycle," said Matsuura.
We have heard that term "granular" more and more in business these days. Basically, it means the product or service should be fairly broad in its appeal," said Matsuura. "If you become too niched, in a certain product, if the recession hits and that demand in that niche goes away, the business is more likely to suffer versus if it's a more granular product, i.e. By price even as well as market, the business has a better chance of spreading out its risk."
