An alternative to starting your own business from scratch is to buy an existing business.
Many entrepreneurs have done this profitably. Brad Sugars is one such entrepreneur, who has an eye for businesses that can be fixed and flipped over for a profit. A serial entrepreneur, Brad has fixed and flipped over thousands of underperforming businesses and sold them for a profit.
The biggest advantage of this method is the ability to limit your own risk, while leveraging the existing resources of the business, like its current customer base.
Here are some guidelines to consider while buying an existing business.
The business has problems but is still surviving: Sure you’ve spotted a business with bad service, terrible presentation and chaotic management, but make sure it’s still able to survive despite all these issues.
Doesn’t require a highly skilled workforce: The idea here is to look for a simple business that can be run on low skills. A business that sells things, people usually buy and doesn’t require any high-level skills.
Generates Cashflow: Don’t worry about the plant, equipment or other depreciating assets -make sure you focus on the cashflow. Buy a business for its cashflow not its assets.
Produces inferior sales and marketing materials: This is one area that you can easily fix, so it’s a great potential opportunity to look out for. You can easily improve marketing that you are able to track. Additionally, the existing customer base can be effectively marketed to for repeat business.
Assess the potential of the business using benchmarks: In order to assess its potential, get some benchmarking done. For instance, analyze the numbers and see what capacity it’s currently running at and by how much you will be able to improve it to sell the business at a profit.
Don’t fall for the business -fall for the deal: Finally, is it a great deal? Your ability to turnaround the business and sell it for a profit greatly relies upon how much you pay for the business.
At the Brad Sugars Business Academy,you will learn this concept in greater detail. Brad will show you how to spot the right business you can buy, fix, and sell for a profit.
All his concepts in “The Entrepreneur Mindset Course” are based on his own real world experiences over the past two decades buying and selling businesses in a variety of industries and economic cycles.