Buying Your Way Into Entrepreneurship

This week we learned about great opportunities for entrepreneurship through acquisition of other peoples companies. There are tremendous opportunities here. A great site that was recommended at looking at potential businesses to acquire can be found at http://www.bizbuysell.com/ . I had a lot of fun looking through different business opportunities. It is an amazing time to acquire businesses because many are willing to sell. To determine which business to acquire you need to consider a few factors. The factors below are a great guidlines. I took this excerptfrom the article  Buying Your Way Into Entrepreneurship by Richard S. Ruback and Royce Yudkoff. Here is is:

In a typical search you’ll encounter
acquisition prospects every day—through
referrals from your network or brokers
or through your own direct outreach to
business owners. These prospects might
total in the thousands over a year or two, so
you will need to dismiss most of them very
quickly. We recommend that you evaluate
each using five criteria:
• Is it profitable?
• Is it an established business?
• Are its revenues and cash flows in the
desired range?
• Do you have the skills to manage it?
• Does it suit your lifestyle (location, hours,
need for travel, and so on)?
If you can answer yes to all of the above,
ask two additional questions that take a bit
more time to investigate:
• How enduringly profitable is the
business?
• Is the owner serious about selling it?
Markers of enduring profitability include
a steady, loyal customer base; a strong
reputation; deep integration with customers’
systems; large switching costs; and few or no
competitors. Examine the financials carefully
and look for strong margins and low customer
churn

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