Becoming a business owner | Commonly asked questions | 3 min read

Ask yourself these 3 questions before starting your own business

Before you rush into buying a business, take a step back and consider these three important questions that will help you determine if you’re really ready to jump in.

1. Are you ready psychologically?

Running a business demands a lot of your time and attention, especially at first. While you may be getting into business to improve your work-life balance, it’s important to be realistic, and understand that you probably won’t be working three days a week and taking long vacations right off the bat. The grind of buying and running a business can take its toll on your psyche, so think about your strengths and weaknesses, and the other factors that will help (or hinder) your success, and look at ways to enhance or combat these where you can. You need to consider all the factors involved in being your own boss, and be honest with yourself

2. Have you done your homework?

When it comes to investing in your future happiness and financial situation it’s generally not a good idea to jump on the first business or franchise you see. Doing your homework is a crucial step, and will help you understand what’s out there, and what you really want. Think about the type of business you want to buy, work out what matches your skills and talents, and think about your past experiences and tolerance for risk, and figure out what you can really handle.

Find out what your family and close friends think about your business endeavours, and start having conversations about time and money expectations before you take the plunge. Buying a business is a big financial commitment, and it’s important that those closest to you are aware of what’s to come. Having a support network in business is crucial, and while you’ll need to establish a professional business network when you get started, having the backing of your family can help set you up for success.

Once you’ve found a business you’re really interested in make sure you conduct your due diligence with the support of experienced professionals. Click here to find out what due diligence is.

3. Do you have a plan?

While you may not have a particular business in mind just yet, it doesn’t mean you can’t have a plan. Start by understanding the steps involved in buying a business, and break it down into sections. Deciding on an industry could be one step, while working out how you’re going to fund your investment is another. Find out what professionals you may need to engage along the way, and start researching those in your area. Finding an experienced accountant and lawyer early on, can make the buying process smoother and ensure that you’re prepared when you do find the perfect opportunity.

Many of these steps will overlap, so it’s a good idea to write things down, and tick them off as you go. Being prepared before you make an investment will help set you up for success once you’re actually a business owner, and the hard work truly begins.

Still not sure if you’re ready to buy a business? See how to choose a business based on your skills.

Tags: , ,