Buy A Business With No Money
Part 1: The Plan (Plan To Buy A Business With No Money)
This article is part 1 of a series in teaching you how to buy a business without spending any money. Make sure you follow-up and read the series. I wish you the best and happy trails.
The Decision
So you have decided to buy a business. Congratulations. You are making a choice that will change your life forever. In my opinion, nothing is better than working for yourself. No boss or anyone telling you what to do is the best part. You decide where your business goes, no one else. It is the first step to financial freedom.
Now that you have decided to go into business for yourself, it's time to get down to the nitty-gritty. The first thing you want to do before you go any further is create a plan or blueprint. This way you know where you are going and how to get there.
But before we get into the plan, there are a few more decisions to make. I want you to look at these decisions and really think about them. Write down your answers on a piece of paper and keep it near.
- Where Are You Going - This is the single most important decision you make after you have decided to buy a business. Decide what you want from your business. Do you want to sell your business in 5 years for $1,000,000.00? Do you want to grow you business to multiple stores nationwide? Do you want to hire a management team and let someone else run the business for you? Decide where you are going before you start and it will make getting there a lot easier.
- What Is Your Vehicle - Now that you have decided where you are going, you need to decide what business you are going to go into. The common misconception is that you need to like the business that you go into. Not true. If your goal is to invest your money and time to make a profit and sell your business, you don't have to love the business you are in. It does make the work easier if you like the product or idea you are selling, but it is not necessary. Write down what business you would like to own on your piece of paper. If you can't think of one, no problem. There are so many businesses for sale you can choose among the masses.
- How Long Is Your Trip Going To Take - Decide how long you want to own your business. If you only want to own it for 3 years then write that down. If you want to own it for 10 years write that down. Remember, owning a business is for making money. Many businesses have a special and meaningful mission to carry out. But all of them are in the business of making money.
Now that you have made some more decisions, we are ready to take those decisions and create a plan. The plan that we are going to create is different from a business plan. A business plan is the plan that outlines the nuts and bolts of the business you have chosen and what your goals are and how you are going to accomplish them. We will go over business plans later in the series.
Outline Your Plan
Here is an outline of what your plan for buying a business without any money should look like:
- Find A Business
- Collect Information
- Speak To Owner
This is the information you need to put in your plan to buy a business.
Find A Business
There are many ways to find a business. Your goal here is to find a business for sale and as much information about that business as possible. Here is a list of ways you can find businesses for sale.
- The Newspaper - The newspaper is a source of local information. There are sections to keep you eye on. The first section to look at is the classified. You can often find businesses or equipment for sale.
- Business For Sale Sites - The are great websites to find businesses for sale.These sites are directories that business owners can sell their businesses on.
- Chamber Of Commerce - Your local Chamber of Commerce often has information regarding businesses in the area that are for sale. Check out the Chamber and ask questions.
- Driving Around - Simply driving around is a good way to find businesses for sale. Go to business parks or areas with heavy business populations and see what you can find.
- Talk To Business Owners - Talk to businesses themselves. Go to business owners and ask them if they know any businesses that are for sale. Usually business owners here what is going on around them in the way of business. You can find out a lot of information this way.
Collect Information
Now that you have found a business that is for sale, it is time to collect as much information about that business as possible. There are some things that you want to look for when collecting information. Here is a list of what to look for.
- Entrepreneur.com - This site is awesome. I spent so much time on this site when I was buying my first business. You can find just about any information you want about buying a business to information on a particular business you are interested in. There are great articles and the site really is an authority in teaching entrepreneurs how to be in business.
- Businesses - Talk to businesses. Let's say you were looking at buying a coffee shop and you wanted to collect information on the local scene. You wanted to know how business was in that area and the competition. A good way to get this information is to talk to businesses in the area. Simply go into the business and strike up a conversation. Ask questions. You will get a lot of information.
- The Leasing Company - Using the coffee shop analogy, the next place to get raw data is the leasing company. The building your business is in more times than not has a leasing company representing the owners. That company usually puts together a packet of information like residential and commercial numbers, traffic counts, median house salary and occupants, and all kinds of good projects as well.
- The Business Owner You Are Buying From - Collect as much information from the business owner you are buying from but don't use it as the only source. Remember, they are trying to sell their business. They are not going to tell you ugly parts. But it is a good way to get information about that business because they have run it.
Talk With The Owner
Speak to the owner about the business. Just like above, you want to ask as many questions about the business as you can. But the business owner may have reservations about divulging too much to you.They don't know you and they may have had 10 other people ask them the same questions already.
Either way, it is important to get some general information from the owner. Ask them how long the business has been there. Ask them what is working and what isn't. Ask them what their business is known for. Ask them how the business is. And finally, you have to ask, "Why are you selling?"
The likelihood that the business owner will give you the real reason is slim but it is still worth asking. They will tell you something. And the more research you do, the better. You want to try to figure out why they are selling because that will usually tell you the state of the business.
It is also important to talk to the owner because you want to build a relationship with them. We will go into this more further along in the series. For now, just be very nice and try to build a friendship with them. If you can't, no problem. But if you can, it will help.
