If taking ownership of a small business is for you, how confident are you things fall into place the way you want?

Buying a small business can be both an exciting and stressful time depending on how things play out.

With that in mind, what should you look for when you want to buy a small business?

Don’t Sleep on Importance of Researching Financial History

Whether this is your first crack at buying a business or you have bought before, one of the keys is research.

Yes, knowing every intimate detail about a business you may buy proves critical.

One of the big keys of course is to know the financial history of a business you have your eyes on. The last thing you can afford to do is buy a small business that is leaking money.

Smallbizgenius.net notes close to 65% of all small business owners start with only $10,000 in capital. Meantime, around 25% of all small business begins without financing altogether. Finally, only about 40% of all small businesses across the country end up being profitable.

Yes, this is some big financial information to digest. 

That said you want to be as sure as you can that you know all the financial and other relevant details of a business. This is before thinking of making it your own at some point.

So, whether you look at how to buy a SaaS business or another of interest to you, do your homework.

Among the financial areas to cover include:

  • A company’s assets and liabilities
  • A company’s normal expenses
  • A company’s unpaid taxes
  • A company’s current or pending lawsuits

By learning as much as you can about a company’s track record, you are in a better position to decide if worth pursuing.

Industry Trends Matter Too

When considering being the next owner of a biz should a sale happen, take time to look at the industry a business is in.

If trends are showing that industry struggling now and likely to do so, do you in fact want to dip your toes in there?

Sure, you can take ownership of a biz not doing all that well in a struggling industry and turn it around for the former. Then again, you could find the task to be rather challenging.

Speaking of location, also think about the actual locale of any business you may become the next owner of.

Even with so many sales these days taking place online, many businesses still have foot traffic.

As a result of such traffic, be sure customers have easy access to the small business you take ownership of. You also want a company where employees have relative ease with which to get to work.

At the end of the day, there is a lot of information to ponder when thinking of being the next small business owner.

That said buying someone’s small business could turn out to be one of the best moves you ever make.