1. What do I want to accomplish from owning a business?
for example, to travel less for work and spend more with my young family or to relocate somewhere closer to my aging parents or to get out of my boring job etc.
2. What am I willing to do to accomplish my goal in question 1?
for example, take a temporary reduced wage as long as the income from the business supports my current lifestyle or to uproot my entire family and move to where my parents are located.
3. How much time am I willing to work in the business? on the business?
A small business owner usually have two roles, one is to work in the business, making sure it is cash flow positive and the second role is to work on growing the business. Both roles require different skill sets.
4. What skills and experience do I have that is transferable to business ownership? Do I have skills to work IN the business? Do I have the experience to work ON the business?
If I don't have the skills to work in the business, can I hire someone easily? If I don't have the experience to work on growing the business, how and where can I find help?
5. What kind of job I absolutely hate to do?
For example, I hate the cold and don't like working outdoor
6. What is the minimum wages I need from the business in order to maintain my current lifestyle?
This will determine the cash flow needed from the business
7. How much cash down payment do I have to purchase the business? How far will it set me back if the business fail?
For example, I have $300,000 savings. My wife has a stable job and we can live off her salary if needs to be. It will probably set me back 5 years of savings if I failed in the business and since I'm only 42 this year, it will not be devastating. However if I can maintain the cash flow of the business, I would be mortgage free before I turn 50; which is 10 years sooner than if I continue with my current employment!
These questions will not only help buyers narrow their search for a suitable business but also allow them to ask questions that focus on whether a particular business for sale will meet their goals. A buyer who is armed with a self evaluation of what he or she wants to accomplish through business ownership will be able to quickly make a decision when the right opportunity present itself.
Submitted by Siew Cheng