RULES OF BUYING A BUSINESS – RULE NO. 2: BECOME AN EXPERT

Buying a business at a great price takes work and preparation. If you are not currently an expert in the industry you are considering you should become one. Interview several people in that industry, read books and articles or take classes. Perhaps you should even consider taking a temporary or part-time job in the industry.

Taking the time to understand the industry could help you avoid a major mistake. For example, are there any trends or regulations that mean the business may experience declining sales in the future? Perhaps the current owner realizes these factors and sees the opportunity to cash out.

If you are considering a franchise I recommend you interview as many current franchisees as possible in order find out all you can about the industry and the business. I am amazed by the number of franchisees you fail to do this and some regret it later. Why else would they put all those names in the offering circular? Make sure to take advantage of the available information.

Also, do not be afraid to find someone in the industry who will mentor you. Many business people are more than willing to help out business owners who are just getting started.