Starting a business can be risky, and many people lack the entrepreneurial skill and vision to make it work. Others find it much safer and more profitable to buy an existing business. There are many other reasons for buying, as opposed to starting a business from scratch, including:

• An existing business (if profitable) may generate cash flow from day one
• Proven business concept, products, services, marketing and sales strategies
• Established customer base, providing referrals and references
• Established suppliers
• Trained employees in place
• Immediate credibility and perception of success
• Seller likely to lend support and may assist with financing
• Easier to secure affordable financing to complete the acquisition

As with choosing a job, the best place to start is with yourself. Give some careful thought to what you need and want out of a business because once you own it, it can own you. So you had better find a business that you enjoy owning and managing, at least until you are in a position to hire someone to manage it for you.

A good objective for any business owner is to buy a business with sufficient potential to bring enough income so that you can delegate the management and other duties to others. Otherwise, it may be just a job with none of the benefits of the independence of ownership.

Also consider very carefully what you have to bring to the business. Do you have the skills to exploit its possibilities? Do you understand the market for its products or services – and the background and skills to expand its sales and marketing functions? What are your limitations that may affect your success?

You may need some help with appraising the value of the business – aside from the asking price the owner has attached to it. If you are not familiar with how to do this, you may do well to seek the help of a consultant or business broker.

As with all entrepreneurial decisions, the key to your success is careful research. Once you are certain the business is right for you and that the price it right, go for it. Good luck.

       For further suggestions on how to proceed if you are considering the purchase of a business, go to your local Small Business Association office, or go to the following web site:
http://entrepreneurs.about.com/od/buyingabusiness/

      To read an excellent article on seven steps for success in buying an existing business, click here.

NOTE: Some people have a talent for taking over a struggling business, correcting the problems, and then turning it over to capable new management. These people are called “turnaround specialists.” Though you may not have the background to accomplish such a feat, consider your purchase of a business as an opportunity to take it one step further in its progress. Just because it is not producing a profit does not mean that the potential was not there. It is possible that the existing owner lacked essential skills, lacked vision of what could be done to improve, or was simply the victim of bad management or market timing. This could work to your advantage, since a failing business is nearly always sold for less money than a thriving business.

     If you are considering buying a failing business, you might want to read the article “Ten Steps to a Successful Turnaround

           A good consultant or mentor can help you sort all this out. Check out carefully the market and the competition. Learn all you can before signing on the dotted line. And don’t forget to get good legal and tax advice.

For general tips for anyone seeking an income opportunity or successful self-employment, click here.