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How do I know if this is the right business to buy?


I found a business I like, but I’m not sure if this is the business I want to buy. How do I know if I am making the right decision?



The most important thing to take into consideration when buying a business is whether the business is truly a good fit for you and whether it matches your skillset. When evaluating a business, it’s just as important to assess whether the business is a good fit for you as it is to evaluate the numbers. If you buy a highly profitable business with a lot of opportunity but you aren’t passionate about the business, it’s unlikely you will be wildly successful. The opposite is also true — the more passionate you are about a business, the more likely you will be successful.

I have seen buyers buy a profitable business and literally run it into the ground in less than a year. I have also seen buyers buy a business and double the profitability within the same period.

Some people did not succeed because the business they purchased was not a good fit for them. While you should definitely evaluate the numbers, most buyers don’t place enough emphasis on whether the business is a good fit for them in terms of skills and passion. Businesses are not stagnant, dormant investments. They interact with your personality and action plans. If you truly enjoy the business and it’s a suitable match for your strengths, then it’s much more likely you will do well than if you don’t enjoy the business.

Regardless of the decision you make, the important thing is that you do make one. I have seen buyers become paralyzed with this decision for over three years when they could have owned, operated, and sold two businesses during this period. They could have learned more operating a couple of businesses than they could have in ten years of researching and analyzing.

On the other hand, I empathize with buyers who cannot overcome their fear of owning a business. Buying a business can be an agonizing process if you’ve never owned one. Coming to grips with your fear can be an insurmountable object for many. However, there is one thing I nearly always hear from first-time business owners after they make the purchase: ”This isn’t that hard. What was I so scared of all along?” Yes, most buyers realize that owning a business is not nearly as intimidating as they originally had thought. While it is hard work, they realize that being a business owner also comes with a lot of freedom.

Ray Kroc bought Mcdonald’s from two guys who thought they were pulling a fast one on him. They thought they were dumping a loser when they sold McDonald’s to Kroc.

How do I know if this is the right business for me?

You will never know for sure. Besides, there is no “perfect” or “right” business. Success has just as much to do with how suitable the business is for you and what you do with the business after you own it as it does with how ideal the business is as an investment.

Here is a short story that should put things in perspective for you. It’s called the “Acres of Diamonds.”

One of the most interesting Americans who lived in the 19th century was a man by the name of Russell Herman Conwell. He was born in 1843 and lived until 1925. Conwell was a lawyer for fifteen years until he became a clergyman. One day, a young man told Conwell he wanted a college education but couldn’t swing it financially. Conwell decided, at that moment, what his aim in life was — he decided to build a university for less fortunate but deserving students. Conwell did have a challenge, however. He would need a few million dollars to build the university. For Conwell — and really anyone with real purpose in life — nothing could stand in the way of his goal.

Several years before this incident, Conwell was intrigued by a true story – with its ageless wisdom.

The story was about a farmer who lived in Africa and through a visitor became tremendously excited about looking for diamonds. Diamonds were already discovered in abundance on the African continent and this farmer got so excited about the idea of millions of dollars worth of diamonds that he sold his farm to head out to the diamond line. He wandered all over the continent, as the years slipped by, constantly searching for diamonds, which he never found. Eventually, he went broke and threw himself into a river, and drowned.

Meanwhile, the new owner of his farm he had just sold picked up an unusual-looking rock about the size of a country egg and put it on his mantle as a sort of curiosity. A visitor stopped by and in viewing the rock practically went into terminal convulsions. He told the new owner of the farm that the funny-looking rock on his mantle was about the biggest diamond that had ever been found. The new owner of the farm said, “Heck, the whole farm is covered with them” — and, sure enough, it was.

The farm turned out to be the Kimberly Diamond Mine … the richest the world has ever known. The original farmer was literally standing on “Acres of Diamonds” until he sold his farm.

Conwell learned from the story of the farmer and continued to teach its moral. Each of us is right in the middle of our own “Acre of Diamonds,” if only we would realize it and develop the ground we are standing on before charging off in search of greener pastures. Conwell told this story many times and attracted enormous audiences. He told the story long enough to have raised the money to start the college for underprivileged deserving students.

In fact, he raised nearly six million dollars, and the university he founded, Temple University in Philadelphia, has at least ten degree-granting colleges and six other schools.

When Russell H. Conwell talked about each of us being right on our own “Acre of Diamonds,” he meant it. This story does not get old … it will be true forever.

Opportunity does not just come along – it is there all the time – we just have to see it.

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