3 Tips for First Time Buyers

 

Buying a business can be an overwhelming experience, especially if it is the first time you take this big step.
Keep the following in mind when deciding to buy a business:

It takes work
If you want your life dream to be fulfilled and aim to make a fortune, remember you have to get into the boat and row it! The sad thing is that many people buy a business and then sit back and relax, which inevitably costs them very dearly.

Know your strengths
You have to know what strengths you have to acquire a certain business. Don’t buy a business simply because the net profit is lucrative or it’s doing a good turnover.

  • Don’t buy a filling station, just because everyone needs fuel
  • Don’t buy a bakery, just because you love baking for your family
  • Don’t buy a beauty salon If you are a mechanic
  • Don’t buy a coffee shop If you can’t fry an egg
  • Don’t buy into the service industry if you are an introvert

 
Ask yourself the following questions:

  • What income do I need from the business to make a living?
  • How much cash do I have available to purchase the business and how much money can I raise – i.e. policies, bonds, etc.?
  • What skills or expertise do I have?
  • What type of business am I suited for?
  • What impact will the business have on my family life and leisure time?
  • How do I relate to people? Am I an introvert or an extrovert?
  • If you are a person, who cannot decide without assistance DON’T BUY! Owning your own business demands that you be a decision maker.

Remember, you must have a passion for the type of industry you want to go into. DON”T buy just for the sake of buying a business!

Why do you want to buy a business

It is most times more advisable to purchase a going concern than to start a business from scratch as the capital outlay can be very costly.

Why do you want to buy a business?

  • As an investment
  • As a tax write off
  • For the children
  • To ensure your own future
  • Keep up with the Jones’es
  • Inherited money, etc. etc. etc
  • To add to your existing income
  • To earn more money

 
Be honest with yourself – what is YOUR reason?

Make sure you use a qualified broker to assist you with this big step in your life. Make sure the broker you work with is registered with the Estate Agency Affairs Board and holds a valid Fidelity Fund Certificate. This way you are also ensured your deposit in the agency’s trust account is managed properly, and your deposit is safe.

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