Before you buy a business in Nashville, you need to know that the area is booming. There is no sign that growth in Music City is going to slow down anytime soon, either. That is great news for you and means many customers for your enterprise. But other than money, what are the benefits of owning a business? What is involved with getting started? Keep reading as we answer these questions and many more.
Are you really ready?
This is the big question that you have to ask yourself before you buy a business. Many new Nashville business owners make the leap of faith without first answering, but it is in your best interest to self-reflect before you take the proverbial plunge. Something else to think about: nearly 9 in 10 small business purchasers went completely off the rails and acquired an enterprise that was vastly different than their original intent. If you are ready for a learning experience, then business ownership might be an ideal opportunity.
When you do buy a business, you get so much more than an income. You have an opportunity to take pride in a product or service offering. You will also be in a unique opportunity to become a leader within your community. Many small business owners are highly involved in the neighborhoods in which their customers live. In addition to this, as an entrepreneur, you are in control of your own destiny. Just as important, you get to create job opportunities that did not exist before.
On the downside, when you become a proprietor, you change not only your professional life but your personal life as well. You may get to spend less time with your friends and family, and you may, at times, feel as though you are married to your job. As you get your feet wet, you will learn the ins and outs of your business by literally getting your hands dirty; you may have to do everything from sweep the floors to take out the trash. Knowing this, ask yourself if you truly still want to buy a business. If the answer is yes, you can keep reading.
A daunting task
Being a business owner is not for the faint of heart. There are many responsibilities, and the bulk of the work will fall squarely upon your shoulders. But there is one way to bypass some growing pains. That is to buy a business that is already known in Nashville. Unlike starting from scratch, you will have a customer base and might even have inventory and experienced employees in place. But just because a business already exists does not mean you can take over without doing your homework.
First, you’ll want to identify other opportunities that might interest you. There are many businesses for sale in Nashville and the surrounding area. Do not limit yourself to a specific type of business; go into the process with an open heart and an open mind. You may be pleasantly surprised where your interests actually lie.
Once you find something that resonates with you, avoid the temptation to let your heart take over. This is a business transaction, after all, and due diligence is the key. Start by asking your broker how long the company has actually been doing business in Nashville. While you can buy a business that is still in its early stages, the longer it has been around, the better. You also need to find out how long its current owner has had the reins. If less than a year, you may want to pull back and evaluate why. As a general rule, people do not buy a business only to offload it immediately. This brings us to your next concern, which is to find out why they are selling.
People sell businesses for many reasons, but they are not always honest about them. Pay close attention to why they have decided to relinquish what is, ostensibly, something very important to them. If they are 35-years-old, just took over ownership, and say they are now suddenly ready to retire, chances are what they mean is that they are not making the money they had hoped. It is not uncommon, however, for people to burnout within five to 10 years. A 50-year-old who has been doing the same thing for the last decade may simply be ready to move on to the next adventure. If they are also looking to buy a business, that is a good sign that they are transitioning and are ready for you to take over.
Finally, you can start crunching numbers. Despite the booming economy in Nashville, when you buy a business, you’ll want to see information on incoming and outgoing money. Ask to look at all of the company’s financial records, down to depreciation on the company car. When you are ready to make an offer, you will want these numbers as a negotiating point. While many business owners will tell you they are skimming off the top, the legal income is the only one that truly matters.
Contact Beacon Exit Advisors today for more information on businesses currently for sale in Davidson and the surrounding counties.