The person who is serious about buying a business must forget all the perceived glamour about “being their own boss”.  Be prepared to make the sacrifices and put in the hard work required to be successful. 

How do I start?

First establish the answers to the following questions.

  • Why do you want your own business? Do you want to work from early morning to last thing, worry about where the money is coming from, chase people for the money, never take leave because your scared of what the staff will do to the business?
  • What expertise or skills can you bring to the business? Do your strengths lie in management, marketing/sales, or on the technical/financial side?
  • What are your weaknesses? Generally, most small businesses require the owner to be a “jack of all trades”, to have all round business skills, like management, financial, marketing, social media and technical.  So now is the time to identify skills lacking and take a short course to overcome that problem.
  • What would be the minimum income (profit/salary) you would need from the business to live on? Your idea may be to buy a smaller or less profitable business and build it up.  That’s fine, but you must know what the minimum income is you need to survive.  Commit pen to paper and write down your monthly expenses.

How much money can you raise?

Cash………………………………………………….

2nd bond on property…………………………..

Insurance policies………………………………

Family/relations etc……………………………

Total………………………………………………R

 

If you intend raising a loan against your property to purchase the business, establish market value and how much you could raise.

  • What type of business would suit you? Retail, service, food, manufacturing? The question should really be, how do you relate to people?  If you have a problem communicating with people, don’t get involved in a business where you must deal with the public on a day-to-day basis as you will end up hating every moment of it.
  • How far are you prepared to travel each day to and from your business. Try to find a business not too far from where you live, unless you intend to relocate.
  • What hours are you prepared to work and how will this affect your family life and leisure time? Often buyers get involved with the disastrous consequences in businesses that operate seven days a week with long daily hours. 
  • A young couple was desperate to sell a business they purchased only a few months ago. They bought the business, blinded by the monthly net profit of R40 000 and the very reasonable price.  They planned to work and save like mad for a few years.  They borrowed the deposit from their families and went to work.  Tremendous, you may say, but the hours of 6am to 8pm, seven days a week were killing – a situation not helped by having a daughter of three.  What started as a dream, ended in a nightmare.  They slept in the store room between shifts, fighting like cat and dog and with no time for family or friends.

 

This undertaking may have worked with the support of other family members to rely on and if the right questions had been asked.  Answers to the questions committed to paper provide a mini prospectus of yourself.  It is the first step and will become a great tool towards getting involved in your own business.