Buying a Small Business? Cheap Deals Are Out There
For the majority of time that we spend on giving advice for becoming a small business owner we are focused on starting your own small business. However, there is of course another way to become a small business owner and that is through simply going out and purchasing one. This happened to a friend of mine who owned a butcher shop. He was looking to retire and wanted to sell his business and out of the blue one day a man from out of state walked in and after a brief discussion wound up buying the company. The person who bought the business had previously owned a hair salon but never anything in the food industry. That brings up two good points one should consider when looking to purchase a small business. First, prior experience running a small business is a big help. You are at least familiar with the ins and outs of hiring, customer service, payroll, etc. and that give you a huge advantage in ensuring the survival of your new venture. More importantly however is having prior experience in industry you are moving into. The buyer in the above story had no prior experience in the food and specifically meat business and was therefore taking a huge risk with his venture. As usual the more you know the better. If you are confident in your ability to hand those above two considerations then perhaps now is the time to buy as there are some great deals, almost steals, out there currently. Fox Business expands, “Research from Pepperdine University’s Graziadio School of Business and Management, the International Business Brokers Association (IBBA) and M&A Source finds that 70 percent of business brokers believe it's a buyers market for businesses valued under $2 million. The research shows that for larger businesses, the market is neutral or favorable to sellers. "It is clear that these small-to-mid–sized businesses are still struggling to come out of the Great Recession,” said John Paglia, a professor and director of the Pepperdine Private Capital Markets Project. "Data also show a number of forces are bearing down on Main Street business owners who desire a good deal when they seek to sell…”"
Source - Fox Business